9 MARCH 2006
PRESS RELEASE
The market shares of Tapiola General and Tapiola Pension increased in 2005. Tapiola is owned by its customers, thus the customers will benefit from the good results. The bonuses and rebates reached EUR 104.7 million exceeding last years amount by over EUR 16 million.
The result 2005 is the highest ever in the Tapiola Group’s history and especially based on successful investments.
The last ten years has been a period of strong development for the Tapiola Group during which the number of employees has increased significantly. In the end of 2005 Tapiola employed 2,730 employees those off-duty included. The personnel increased by 144 persons from year 2004. The estimated increase in 2006 is about 200 employees.
Tapiola General’s Growth Continued
The total result of Tapiola General group was EUR 169.6 million (EUR 101.8 million) and the total result of the non-life insurance business EUR 176.5 million (EUR 111.7 million). The operating profit amounted to EUR 99.0 million (EUR 102.4 million) and the valuation difference to EUR 70.6 million (EUR -0.6 million). The premiums written for the Tapiola General group increased 11.4% to EUR 589.0 million (EUR 528.8 million). Tapiola predicts that the market share will increase further to 18.2% (17.5%). The Tapiola General group’s combined ratio before unwinding of discount was 106.2% (106.6%). This key figure expresses the customers’ benefit: compensations paid by Tapiola and the operating expenses exceeds the amount of collected premiums, which in their turn are decreased by the bonuses and rebates distributed to the customers. The return on investment for premiums collected in advance from the customers is taken into account when setting the service fees.
The return of investment at current value of Tapiola General parent company was 11.0% (8.5%). The Tapiola General group’s solvency capital increased to EUR 1,216.3 million (EUR 1,082.3 million) and the risk-carrying capacity, i.e. the solvency capital in relation to premiums earned, reached 219.7% (221.3%).
The Five-year Average Return of Tapiola Pension’s Investments among the best in the Business
Tapiola Pension reached a good result 2005. The total result amounted to EUR 306.0 million (EUR 228.1 million). The good result is especially a consequence of increased return on investment due to the favourable development on the investment markets. Tapiola Pension’s return on investment increased to 9.2% (7.2%). The five-year average return on investment on an annual level is 6.8% which is an excellent result for the period. The market share is estimated to increase to 15.8% (15.4%). The solvency margin increased to 24.1% (20.7%) of the technical provisions in the solvency accounting and was 2.6-fold (2.8-fold) the solvency limit.
Over EUR 50 Million of Tapiola Life’s Result to ensure Future Customer Benefits
The total result of Tapiola Life group was EUR 103.6 million (EUR 107.4 million). The result was weakened by a EUR 52.7 million liability supplement to ensure good customer benefits in the future. The operating profit reached EUR 40.3 million (EUR 63.0 million) and the valuation difference EUR 63.3 million (EUR 44.4 million). Tapiola Life group’s premiums written decreased by 3.5% to EUR 200.9 million (EUR 208.1 million), i.a. as a result of the modest sale of single premium life insurance savings policies. Tapiola Life’s market share was 6.3% (6.9%) of premiums written and 8.3% (8.7%) of insurance savings.
The return on investment at current value of Tapiola Life parent company was 8.7% (7.8%). The corresponding figure of the subsidiary Tapiola Corporate Life was also 8.7% (7.1%). Tapiola Life group’s expense ratio calculated on the basis of total expense loadings decreased to 97.6% (108.9%). The solvency capital of the life group amounted to EUR 408.1 million (EUR 360.9 million) and the solvency ratio, i.e. the solvency capital in relation to the technical provisions, increased to 19.1% (17.9%). The extended solvency margin of Tapiola Life group was 3.3-fold the lowest limit of the target zone.
Financial Companies of the Tapiola Group Reached Their Goals
Tapiola Bank Ltd had 49,000 customers in the end of 2005 which was the company’s first full financial year. The bank’s loan portfolio was EUR 253.5 million and the total funds on deposit EUR 296.3 million. The public’s interest in the new bank has remained, the services get high marks from the customers and potential customers are especially interested in the low service fees and that interest is calculated on the daily balance. The loss during the accounting period decreased to EUR 8.5 million (EUR 10.8million).
The fund capital managed by Tapiola Fund Management Company Ltd increased by 33% to EUR 974.3 million (EUR 730.2 million). The number of unit holders increased to 15,067 (10 167) and the operating profit was EUR 1.7 million (EUR 0.8 million). The company’s market share was 2.2% (2.3%). Tapiola Fund Management Company Ltd is the eight largest fund company in Finland.
Tapiola Asset Management Ltd’s assets under management increased by 19.4% to EUR 4,615.0 million (EUR 3,865.8 million). The company’s operating profit was EUR 3.2 million. Tapiola Asset Management Ltd is one of the six largest asset management companies in Finland.
ADDITIONAL INFORMATION
Markku Paakkanen, Director, Financial Services, tel. (09) 453 2500, www.tapiola.fi/tulos (in Finnish)