LocalTapiola Group's earnings for 2016 – Customers benefit from our success in line with our lifelong security strategy

9.3.2017 -

LocalTapiola's earnings continued to improve, market share will also increase this year.

• The expansion of lifelong security services began in August with the opening of a new network of lifelong security offices, the first of which is at the Iso Omena shopping centre in Espoo. In the next few years, LocalTapiola will open 40–60 lifelong security offices.

• To reinforce its customer-centric operating model, LocalTapiola established 15 new digicenters around Finland in 2016. The Digicenters offer local, real-time service via electronic channels.

• LocalTapiola is the market leader in motor liability insurance.

• LocalTapiola's national fire extinguishing training sessions were attended by 27,000 Finns.

• Of the major insurance companies, LocalTapiola has the most satisfied customers.

Transforming a product-based company into a lifelong security company


• LocalTapiola will reduce the prices of its motor liability and home insurance policies in 2017 as a way of thanking its customers. The discounts will be worth a total of EUR 14 million per year.

• We are strengthening our approach to health and well-being. New openings are on the way in the spring.

• We help our customers to become wealthier by investing their assets as if they were our own. As a mutual company, we will launch a new and different range of investments in the spring for our customers to use.

• We will also train more heroes this year. In 2017, LocalTapiola will offer free resuscitation or emergency first-aid training to 30,000 school pupils and 15,000 customers as a lifelong security activity.

Advance information on the 2016 financial statements of LocalTapiola Group companies


• Customers were paid a total of EUR 967 million in compensation and EUR 59 million in technical interest. EUR 90 million was distributed to customers in the form of customer bonuses and refunds.

• LocalTapiola Group's operating profit was EUR 326.3 million and its overall result was EUR 362.7 million.* LocalTapiola Group is headed by LocalTapiola General, and it also includes 20 regional non-life insurance companies and LocalTapiola Life, as well as the other companies consolidated into the Group by virtue of being owned by these LocalTapiola companies. *No figures are presented for comparison because 2016 is the first financial period for which consolidated financial statements have been prepared for LocalTapiola Group.

• LocalTapiola Life recorded an operating profit of EUR 63.4 million (EUR 98.9 million). The overall result rose to EUR 72.7 million (EUR 51.7 million).

• LocalTapiola Asset Management Ltd's profit during the review period was EUR 4.3 million (EUR 5.7 million). The capital invested in LocalTapiola funds amounted to EUR 3.8 billion (EUR 3.6 billion).

• LocalTapiola Real Estate Asset Management Group's operating profit was EUR 3.2 million (EUR 4.1 million).

Comments by Erkki Moisander, CEO of LocalTapiola Group


LocalTapiola Group's result for 2016 was good. LocalTapiola Group's premium income from direct non-life insurance increased by 1.3 per cent to EUR 1,118.8 million.* LocalTapiola's market share of premium income for life insurance showed strong development thanks to EUR 422 million of premium income. Our market share in term life insurance increased to more than 24 per cent. We posted another positive result in terms of net transfers of occupational accident insurance. We are the market leader in motor liability insurance.

The number of customers using our asset management services increased in 2016. Low interest rates and fluctuations in investment markets have increased customers' interest in mutual fund services and asset management services.

We are investing in preventing loss and damage and in providing proactive health and well-being services. We share any benefits that arise with our customers in the form of lower prices and even better preventive services. As a lifelong security company, we will reduce the prices of our motor liability and home insurance policies in 2017 as a way of thanking our customers. The discounts will be worth a total of EUR 14 million per year. We are also freezing the prices of other types of non-life insurance. As a mutual company, it is natural for LocalTapiola to thank its customers and reward them for not making claims. Of the major insurance companies, we have the most satisfied personal customers.

We want to make the everyday lives of Finnish people safer, healthier and more financially successful. We highlight a range of solutions for forecasting, security and well-being – we do not just contact our customers about insurance sales, billing and claims.

We continued expanding our business into health and well-being services in accordance with our lifelong security strategy. In 2016, LocalTapiola became the largest shareholder of Pihlajalinna, a listed company providing social and health care services. A further example of lifelong security is our new office concept, which was inaugurated last year and combines health, well-being and security services. The first new lifelong security office was opened at the Iso Omena shopping centre in Espoo. In the next few years, we intend to open 40–60 lifelong security offices in Finland.

An excellent example of corporate responsibility and our preventive mindset is Hero Training, which has enabled tens of thousands of Finnish people to gain fire extinguishing skills free of charge. Hero Training received the award for the Security Activity of 2016 in the Finnish Security Awards competition. In 2017, we will provide resuscitation training to 30,000 school pupils and emergency first-aid training to 15,000 customers in collaboration with the Finnish Red Cross – this will be our lifelong security activity of the year.

As a result of the strategic partnership with S Group, LocalTapiola's service for handling insurance was taken into use as part of the S-Mobile service. An additional customer benefit is provided by the bonus partnership with S Group for private household customers. More than 600,000 households received S Group Bonus for their families' insurance premiums in 2016.

On 15 November 2016, we made a decision in principle to transfer the regional motor liability insurance portfolios from LocalTapiola General to LocalTapiola's regional companies on 30 June 2017. We believe this will improve the customer experience and boost the role of the regional companies as local lifelong security companies.

We were the most improved company overall and the best insurance company in a 2016 survey focusing on customer loyalty. The result demonstrates that a mutual company is able to offer its customers the best advantages and benefits. In the EPSI Rating study measuring the satisfaction among customers of insurance companies, personal customers ranked us the best large company. We owe our customers humble thanks for this.

LocalTapiola General’s solvency was strong


LocalTapiola General’s operating profit during the review period was EUR 182.9 million (EUR 181.0 million). The overall result was EUR 174.4 million (EUR 150.3 million). The combined ratio excluding the unwinding of discount expenses was 92.6 per cent (98.3%).

"Financially, 2016 was a successful year. Claims expenses were reduced thanks to favourable claims trends and risk management work to prevent loss and damage. It is particularly pleasing that investment returns were good, and this had a major impact on the result," says Jari Sundström, Managing Director.

The rate of return on investments was 4.4 per cent (4.8%).

The company's solvency was strong in accordance with the Solvency II framework, which was adopted at the beginning of 2016. The company's solvency position was 273 per cent of the required level. Excellent solvency will enable us to continue developing lifelong security services and customer bonuses.

LocalTapiola Life increased its overall result and market share


LocalTapiola Life's operating profit was EUR 63.4 million (EUR 98.9 million) and its overall result increased to EUR 72.7 million (EUR 51.7 million). The result was good thanks to the 5.0 per cent (4.8%) return on investment and several years of sustained growth in the insurance portfolio. The company's solvency position in accordance with the Solvency II framework was 190 per cent of the required level.

LocalTapiola Life's premium income was EUR 421.7 million (EUR 423.0 million). Group pension insurance and term life insurance showed the greatest increases in premium income. Premium income from savings life insurance policies remained close to the previous year's level, even though premium income in the sector as a whole decreased by 30 per cent.

"Our market share increased in all of our focal areas. As in previous years, we grew faster than the sector as a whole in term life insurance, and our market share is already more than 24 per cent. Our sales of group pension insurance and savings insurance policies also showed strong development compared with the sector as a whole," says Managing Director Minna Kohmo.

In the first half of 2017, LocalTapiola will launch new joint investment solutions for its new and existing owner-customers. These solutions will provide benefits for everyone, whether they are major investors or customers making monthly savings.

The customer assets managed by LocalTapiola Asset Management grew and the company gained more customers


The customer assets managed by LocalTapiola Asset Management increased to EUR 9.7 billion (EUR 9.4 billion), with capital in LocalTapiola funds accounting for EUR 3.8 billion (EUR 3.6 billion) of this sum. The profit for the review period was EUR 4.3 million (EUR 5.7 million).

"The number of customers using our asset management services increased in 2016. Low interest rates and fluctuations in investment markets have increased customers' interest in mutual fund services and asset management services," says Tom Liljeström, Managing Director.

LocalTapiola Real Estate Asset Management expanded its real estate fund business


LocalTapiola Real Estate Asset Management Group's turnover in the review period was EUR 15.5 million (EUR 16.1 million). The operating profit was EUR 3.2 million (EUR 4.1 million).

LocalTapiola Real Estate Asset Management expanded its real estate fund business in accordance with its strategy. The value of real estate assets under management reached the target for 2016 of EUR 2.6 billion.

"Our fund capital increased to EUR 1.4 billion and we succeeded in acquiring good investment targets for our new funds. In addition, our customers received excellent returns on their real estate investments in 2016," says Vesa Immonen, Managing Director.


* No figures are presented for comparison because 2016 is the first financial period for which consolidated financial statements have been prepared for LocalTapiola Group.