26 January 2010
• Return on Tapiola Pension’s investment portfolio was 13.5 per cent in 2009.
• Return on equity was 39.4 per cent, and return on fixed-income investments was 8.0 per cent.
• The solvency margin which indicates financial solidity was 23.7 per cent in relation to technical provisions and 3.0 times the solvency limit.
• Average five-year return (2005–2009) on Tapiola Pension’s investment portfolio was 4.8 per cent and average ten-year return (2000–2009) was 5.3 per cent.
According to preliminary financial statement figures for 2009, the return on Tapiola Pension’s investment portfolio at current value was 13.5 per cent (–8.3% in 2008). According to Satu Huber, Managing Director of Tapiola Pension, the result is the best ever.
Tapiola Pension’s solvency ratio was about 23.7 per cent (16.2%), and the solvency margin was 3.0 times the solvency limit (2.9 times). Without the temporary legislation, the corresponding figures would have been 18.8 per cent (11.5 %) and 2.4 (2.0).
Tapiola Pension augmented its investments in companies considerably during the year. The proportion of equity investments increased significantly in 2009, from 15 per cent early in the year to nearly 30 per cent at the end of the year. Investments in bonds issued by companies also increased considerably. Direct equity investments were the greatest success in the investment portfolio with a return of more than 50% during the year. Investments in companies (equities and bonds) now account for nearly 50 per cent of all investments.
Average annual return over the decade 5.3 per cent
The entire decade was a profitable period for Tapiola Pension’s investments and a good example of the efficiency of systematic, independent investment activities that are based on thorough analysis of investment targets.
The negative investment result in 2008 was fully covered and exceeded in 2009. The average annual return in 2008–2009 was 2.1 per cent.
“During the past ten years, from 2000 to 2009, the average annual return on investment activities was 5.3 per cent. The average annual return over five years was 4.8 per cent,” says Investment Director Hanna Hiidenpalo. “The past decade showed that return on equities can be very low or even negative for a long time. Both the broad-based European stock index Stoxx 600 and the S&P 500 posted losses from 2000 to 2009. On average, return on Finnish shares on the Helsinki Stock Exchange was less than 2 per cent a year.”
In the same ten-year period, the cumulative return on Tapiola Pension’s mainly European equity investments was 58.3 per cent, or 4.7 per cent a year on average. Fixed-income investments yielded a return of about 5.2 per cent a year from 2000 to 2009, which is in line with the market. Real-estate investments brought an annual return of 6.3 per cent.
Tapiola Pension pays about EUR 18,6 million (EUR 12.7 million), or 0.33 per cent (0.22%) of the payroll, in customer bonuses.
The financial figures in this press release are preliminary. Preliminary financial statement data of Tapiola Group companies for 2009 will be presented to the media on Tuesday 16 February 2010 at 9:00 am. Audited financial results of the companies will be published in the week of 22 March.
Managing Director Satu Huber
+358 9 453 2619
+358 9 453 3310
Tapiola Corporate Communications