Development of companies
- Tapiola General’s premium income outperformed the industry, growing by 4.0 per cent to EUR 675.1 million (EUR 648.9 million). The overall result of the company increased by EUR 344.3 million to EUR 149.1 million (EUR -195.2 million). Its solvency ratio (solvency capital in relation to premiums earned) rose to 203.6 per cent (189.2).
- Tapiola Life Group’s premium income increased by 13.7 per cent to EUR 233.1 million (EUR 205.0 million). Tapiola Life Group's overall result increased by EUR 214.4 million to EUR 121.6 million (EUR -92.8 million). The Group’s solvency ratio rose to 17.3 per cent (14.7%).
- Tapiola Pension's return on capital employed at current value reached an all-time high. The return on investments at current value was 13.5 per cent (-8.3%). The overall result of the company increased by EUR 1,195.3 million to EUR 583.1 million (EUR -612.2 million). Tapiola Pension’s solvency ratio rose to approximately 23.7 per cent (16.2%), and the solvency margin increased to 3.0 times the solvency limit (2.9).
- Tapiola Bank’s result for the financial year rose to EUR 1.7 million (EUR 1.6 million). The number of bank customers increased to 184,400 in 2009 (159,400 customers). The bank’s credits and fund-raising from customers also grew.
- Tapiola Asset Management's operating profit increased to EUR 0.5 million (EUR -0.2 million). The number of unit holders of funds managed by Tapiola Asset Management increased by nearly 11,000 unit holders to almost 45,000 unit holders, and the fund capital of mutual funds managed by Asset Management increased from EUR 1,026 million to EUR 1,594 million.
- The turnover of Tapiola Real Estate rose to EUR 7.5 million (EUR 6.7 million) and operating profit to EUR 0.7 million (EUR 0.5 million).
Review by the President
“Tapiola Group's good performance was due to profitable investments, growth of business volume and decrease in claims incurred. The strong recovery measures in the global economy turned the development of the financial markets around after the crash of the previous year. Also, the focus on the costs of our companies as well as insurance policy pricing that better matches the risks have started to bear fruit as planned,” says Tapiola Group's President Asmo Kalpala.
Tapiola General’s claims incurred decreased, because the number of major claims was down significantly compared to last year's corresponding period. The development has been particularly good in the corporate customer segment.
“Despite the uncertain economic situation, we are expecting growth to continue also this year, although we predict that the investment environment will again become more challenging. The companies’ strong solvency gives us means for the long-term development of our group, despite the economic uncertainty,” says Kalpala.
Tapiola General's overall result increased by EUR 344.3 million to EUR 149.1 million (EUR -195.2 million). “Successful investment activities were the main reason behind the improved performance,” says Juha-Pekka Halmeenmäki, Managing Director of Tapiola General. Net investment income at current value rose to 7.2 per cent (-4.6%).
The company’s solvency capital rose to EUR 1,317.0 million (EUR 1,174.5 million), and solvency ratio (solvency capital in relation to premiums earned) rose to 203.6 per cent (189.2%).
Tapiola General Group’s premium income outperformed the industry, increasing by 4.0 per cent to EUR 675.1 million (EUR 648.9 million). According to the estimate by the Federation of Finnish Financial Services, the premium income from non-life insurance increased by approximately two per cent during the financial year. The company’s direct business premium income increased by 3.9 per cent to EUR 629.5 million (EUR 606.1 million).
Within non-life insurance operations, the value of the benefits given to owner-customers amounted to EUR 72.5 million (EUR 71.3 million). The combined ratio before unwinding of discount expense that measures the company's profitability was 102.7 per cent (109.5%). The combined ratio is affected by benefits given to owner-customers. Without bonuses the combined ratio before unwinding of discount expense would have been 94.7 per cent (101.0%).
Life insurance income increased by 13.7 per cent to EUR 233.1 million (EUR 205.0 million). “The increase was most significant in unit-linked continuous savings life insurance policies and term life insurance policies,” says Minna Kohmo, Tapiola Life's Managing Director.
According to the Federation of Finnish Financial Services, life insurance income in the industry increased by approximately 17.9 per cent during the review period, where growth in the financial capital redemption market brought in new income. Without this effect, the income increased by approximately 0.5 per cent. Tapiola Life did not grant any capital redemption contracts in 2009.
The Tapiola Life Group's overall result increased by EUR 214.4 million to EUR 121.6 million (EUR -92.8 million).
Tapiola Life’s net investment income at current value rose to 7.0 per cent (-1.1%), and in the subsidiary Tapiola Corporate Life, which merged into its parent company at the end of the year, net income rose to 6.8 per cent (-1.2%). The Group's technical provisions amounted to EUR 2.7 billion (EUR 2.6 billion). Tapiola Life's and Tapiola Corporate Life’s customer bonuses amounted to EUR 9.8 million (EUR 9.7 million).
The solvency ratio of Tapiola Life Group was at a very good level at 17.3 per cent (14.7%).
Tapiola Corporate Life’s merger with Tapiola Mutual Life Assurance Company was implemented on 31 December 2009. “The merger improves financial performance and creates a good basis for the development of services for corporate and private customers in the continuously challenging financial situation,” says Kohmo.
Tapiola Bank Ltd.
Tapiola Bank’s result rose to EUR 1.7 million (EUR 1.6 million). “Despite the uncertain situation, the result for the financial year is clearly better than anticipated,” says Managing Director Harri Lauslahti.
The credit portfolio grew by EUR 183 million to EUR 1,156 million (EUR 973 million) and fund-raising from customers by EUR 82 million to EUR 1,272 million (EUR 1,190 million). Demand for housing loans was high, and the credit portfolio grew more rapidly than the sector’s average growth.
The bank’s interest margin was EUR 13 million (EUR 12 million), and solvency ratio remained strong, being 16.3 per cent (18.7%) at the end of the financial period.
The number of Tapiola Bank's customers increased by 25,000 to 184,400 customers (159,400). The bank’s market share during the financial year was 2 per cent of primary bank customers and 2 per cent of secondary bank customers. Tapiola Bank’s market share of deposits was 1.2 per cent (1.1%).
The customer funds managed by the Tapiola Bank Group increased to EUR 6,836 million (EUR 6,089 million) by the end of the financial year.
Tapiola Asset Management Ltd
The fund capital in the mutual funds managed by Tapiola Asset Management increased from EUR 1,026 million to EUR 1,594 million in 2009. Most of the fund capital growth came from subscription issues. Asset Management’s result rose to EUR 0.5 million (EUR -0.2 million). The company's market share of the mutual funds registered in Finland increased to 2.9 per cent (2.5%) at the end of the year.
Tapiola’s funds gained nearly eleven thousand new unit holders during the year, increasing the number of unit holders to nearly forty-five thousand in 26 different funds.
Investments from corporate and community customers grew significantly in 2009. “We gained new customers from various kinds of institutional investors. Also existing institutional customers increased the assets managed by Tapiola Asset Management. Investments were made fairly evenly in fixed-income, equity and balanced funds, as well as in discretionary asset management,” says Tom Liljeström, Managing Director of Tapiola Asset Management.
The good investment year was also reflected in the positive development of the return on customer portfolios and mutual funds under the management of Tapiola Asset Management Ltd. “The performance of the mutual funds as regards investments was outstanding, both in absolute terms and relative to risks,” says Liljeström.
Tapiola Real Estate Ltd.
According to Tapiola Real Estate's Managing Director Vesa Immonen, year 2009 was fairly quiet on the real estate market due to the economic recession and financial crisis. However, the real estate assets managed by the company grew by EUR 139.6 million to EUR 2,309.1 million (EUR 2,169.5 million) and the leasable surface by 131,000 square meters to 1.1 million square meters (1.0 million square meters).
The turnover of Tapiola Real Estate grew by 12.7 per cent to EUR 7.5 million (EUR 6.7 million), and the company’s operating profit was EUR 0.7 million (EUR 0.5 million). The company's equity ratio rose to 42.5 per cent (27.8%) at the end of the year.
During the financial year, the company carried out real estate investments totalling EUR 268.0 million (EUR 360.2 million) and real estate sales totalling EUR 42.7 million (EUR 266.0 million) for its customers.
The company acquired new investors and investments for the funds it manages, which resulted in the growth of assets in real estate funds to EUR 223.7 million (EUR 148.6 million).
According to Managing Director Satu Huber, the result of Tapiola Pension's investments is the best ever. The return on investments at current value rose to 13.5 per cent (-8.3%). Net return on investment at current value rose to EUR 591.2 million (EUR -631.4 million).
Tapiola Pension augmented its investments in companies considerably during the year. The proportion of equity investments increased significantly in 2009. The amount of equity investments doubled during the year from the level of less than 15 per cent at the beginning of the year. Investments in bonds issued by companies also increased significantly. Investments in companies (equities and bonds) accounted for nearly 50 per cent of all investments. Return on equity was 39.4 per cent, and return on fixed-income investments totalled 8.1 per cent.
The overall result of the company rose by EUR 1,195.3 million to EUR 583.1 million (EUR -612.2 million).
Tapiola Pension's premium income fell by 1.1 per cent to EUR 1,388.0 million (EUR 1,403.0 million). The reason for this was the reduction in payrolls due to the economic recession.
Tapiola Pension’s solvency ratio rose to approximately 23.7 per cent (16.2%), and the solvency margin increased to 3.0 times the solvency limit (2.9). Without the temporary changes in legislation, the corresponding figures would have been 18.8 per cent (11.5%) and 2.4 times (2.0). The amount of customer bonuses totals EUR 18.6 million (EUR 12.7 million).
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