22 August 2007
The overall result of Tapiola Pension during the period 1 January 2007 through 30 June 2007 was positive. The result increased to EUR 57.7 million, whereas it showed a deficit of EUR -50.1 million during the same period last year. The overall result of Tapiola Pension is the total amount of underwriting business and investment results and loading profit.
Tapiola Pension’s premiums written rose by 4.7 percent to EUR 623.3 million (EUR 595.6 million).
The operating expenses were EUR 3.9 million (EUR 6.2 million) lower than the premium expense loading and amounted to 84.5 percent (74.6%) of the premium expense loading.
Tapiola Pension’s investment income at current value during the first half of 2007 was 3.7 percent (1.0%). Investments at current value reached EUR 7,906.8 million (12/2006: EUR 7,404.8 million). The net investment income at current value was EUR 281.4 million (EUR 72.7 million).
Tapiola Pension’s Investment Policy Stresses Long-term Objects
The first and foremost purpose of Tapiola Pension is to secure the customers’ pensions. Therefore, the assets accrued from premiums for the future and current pensions are invested both protectively and profitably. The goal for long-term investment operations is to gain a sufficient and stable return by avoiding oversized capital risks.
According to Hanna Hiidenpalo, Director of Tapiola Pension Investment Operations, the investment policy of Tapiola Pension differs somewhat from those of competitors. The investment process of Tapiola Pension stresses long-term approach, and the investments are not under continuous trading. According to Hiidenpalo, the average investment term is 3-5 years, and often even longer than that.
During the first half of the year, the share of equity investments of Tapiola Pension was slightly increased. As to other parts, the investment policy remains intact.
- We have not increased so called alternative investments such as hedge funds, Hiidenpalo states.
- Our own analysis has, throughout the years, been one of the most significant cornerstones of the investment operations of Tapiola Pension. In practice this requires a profound knowledge of investment objects. Tapiola Pension’s investment policy and risk-taking is not based on various market indexes. This differentiates us slightly from our competitors who mostly rely on traditional index-linked objects.
The Act on Calculation of the Solvency Limit and Covering the Technical Provisions of Pension Institutions entered into force in the beginning of 2007. For instance, risks relating to investment are observed when accounting the solvency limit for pension institutions. During the first half of 2007, the solvency margin was 1.9-fold the solvency limit set by the authorities. The solvency margin of Tapiola Pension amounted to 24.6 percent (12/2006: 24.3%) of the technical provisions in solvency accounting.
Success for Tapiola Pension in transfers of employee pension insurances
In the beginning of 2007, the Pensions Acts concerning private sector wage earners were integrated into a single Employees’ Pensions Act (TyEL). Tapiola Pension enjoyed success with regard to the transfers of statutory employee pension insurances between the authorized pension companies. Tapiola Pension’s total result for the transfer period that terminated at the end of June showed a profit of EUR 2.5 million.
During the first six months of 2007, the premiums written from basic employee pension insurances grew by 4.2 percent to EUR 539.3 million (EUR 517.7 million). The premium income from insurances subject to the Self-Employed Persons Pensions Act grew by 7.7 percent to EUR 82.3 million (EUR 76.4 million).
The estimated yearly employee pension insurance total payroll insured by Tapiola Pension increased by 6.4 percent to EUR 5,261.8 million. The estimated income for insurance subject to the Self-Employed Persons Pensions Act increased by 5.3 percent amounting to EUR 822.0 million.
At the end of the period Tapiola Pension had 112,783 pensioners (12/2006: 110,624).
Olli-Pekka Laine, Managing Director, Tapiola Pension: tel. +358 9 453 2619
Markku Paakkanen, Director, Financial and Information Management Services: tel. +358 9 453 2500
Tiina Niemi / Information Services