Interim report of Tapiola Pension for 1 January–30 June 2010
• Tapiola Pension’s net return on investments at current value was 3.9 per cent for 1 January to 30 June 2010.
• The solvency ratio rose at the end of June to 26.7 per cent, and the solvency position was 3.0.
• The return on equity investments was 3.1 per cent and on fixed income investments 4.7 per cent.
• The overall financial result amounted to EUR 237.2 million.
The return on the investments of Tapiola Pension during the six-month period was 3.9 per cent at current value (4,9 % 6/2009). “The return on investments during the first six months of the year can be considered good, given the developments in the global economy. The investment environment has continued to be challenging, in particular due to the strong volatility of markets,” says Hanna Hiidenpalo, Investment Director of Tapiola Pension.
The current value of investments amounted to EUR 8,957.8 million. The overall financial result of Tapiola Pension amounted to EUR 237.2 (176.2) million.
The equity and fixed income investments of Tapiola Pension produced better returns than the average market gains. Fixed income investments produced excellent returns thanks to the good choices made regarding countries and companies. The return on bonds was 5.1 per cent (3.7%) and on equity investments 3.1 per cent (14.4%). The return on real estate investments was 1.9 per cent (0.0%).
Both fixed income and equity investments produced better returns than their respective benchmark indexes. The return on the Eurostoxx 600 index describing an extensive part of the European stock markets was −2.3 per cent while the Iboxx index describing the return on the European fixed income markets was 2.8 per cent.
The solvency ratio improved to 26.7 per cent (18.5 %) of technical provisions, and the solvency position was 3.0 (2.9). Without the effect of temporary amendments to legislation, the solvency ratio would have been 21.6 per cent (13.8%), and the solvency position would have been 2.4 (2.2).
The general feeling regarding economic growth is that of wait and see
”The investment outlook for the latter half of 2010 still has a lot of uncertainty. The investment environment is challenging, and the return levels of last year are not likely to be achieved. The general feeling regarding economic growth currently is that of wait and see. The business of Finnish export industries has started picking up, which will have a positive impact on the service sector, and consequently on employment,” says Satu Huber, Managing Director of Tapiola Pension.
Tapiola Pension’s net return on investments during the first six months was clearly above the required level. The good solvency of the company provides a good foundation for long-term investment activities which will benefit the customers of Tapiola Pension.
Total payroll, the most important element of sustainable financing of pension rights, seems to be slowly taking an upward turn. ”Our premium income has slightly increased from last year. We are glad for our customers when we see that their finances have remained relatively sound even during these difficult economic times,” says Huber. During the first six months, premium income amounted to EUR 717.5 (715.3) million.
Tapiola Pension’s net return on investments (pdf)
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