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LocalTapiola Group’s half-yearly report for 1 January–30 June 2025: Finns are not skimping on insurance cover, but the tools for increasing wealth are being underused

For LocalTapiola Group, the early part of the year was marked by Finland’s stagnant economic situation and an investment market thrown into disarray by the risk of a trade war. In a challenging operating landscape, the group performed well. Premiums written for both non-life and life insurance continued to grow. During the early part of 2025, we paid our customers EUR 514 million (+0.6%) in claims under non-life policies. Finns did not skimp on their insurance cover, but when it comes to increasing our wealth, we are still learning. The tools for increasing wealth should not be reduced, they need to be expanded – and Finns should be encouraged to use them.
Kaksi työntekijää tutkailee tablettia portaikossa.

Key figures, LocalTapiola Group, 1–6/2025 (toteuma 1–6/2024)

  • Operating result, EUR million: 190 (142)
  • Total result, EUR million: 162 (252)
  • Number of customers, thousand: 1,829 (1,803)
  • Customer bonuses, EUR million: 88 (79)

Non-life insurance

  • Premiums written, direct non-life insurance, EUR million: 1,019 (961)
  • Combined ratio, %: 95.2 (102.6)
  • Cost ratio, %: 29.9 (30.8)

Life insurance, saving, motor vehicle finance

  • Premiums written, term life insurance, EUR million: 85 (81)
  • Net sales, savings life insurance, EUR million: 143 (83)
  • Assets under management (gross), EUR billion: 33.6 (30.5)
  • Finance portfolio, EUR billion: 2.5 (2.4)

Comment by President Sari Heinonen:

“Finns’ purchasing power continues to recover, but a real turn in the economy is eluding us, and the situation on the job market has not eased up yet. In May, the rolling annual sum of bankruptcies reached its highest level since 1997, while the unemployment rate climbed above ten per cent. Businesses are standing on tiptoes, and, under cost pressure, they are also more eager to shop around for their insurances. Increased unemployment, and redundancies, are decreasing the number of insurable staff at companies and are thus directly reflected at insurance firms.As a lifelong security company, our business operations provide a cross-section of the daily life of Finnish consumers, businesses and investors. To a large extent, LocalTapiola Group’s success mirrors how Finnish society and our 1.8 million customers are faring. Fortunately, throughout the spring, there were also good news about their situation: consumers’ confidence in their own finances is recovering, and economic growth is picking up pace gradually. If, on top of this, the global economic uncertainty will unwind, growth may well surpass projections.Model pupils of preparedness, Finns have not skimped on their insurance cover even in difficult economic times. In the first half of the year, direct non-life insurance premiums written generated by LocalTapiola Group increased 6.1 per cent, and a growth of over six per cent was also recorded in life insurance. Unprecedented trade policy uncertainty shook the investment market, but the early part of 2025 ended on a positive note. The own investments of LocalTapiola Group’s insurance companies generated a profit of EUR 141 million. As a customer-owned corporate group, it is of particular importance for us that our owner-customers will benefit from the success achieved by LocalTapiola, and, for example, LocalTapiola Life will pay more customer bonuses this year than ever before.During the early part of the year, we paid our customers EUR 514 million in non-life insurance claims, up 0.6 per cent from the corresponding period in 2024. Claim numbers decreased in several insurance lines but continued to grow in voluntary personal insurance and in casco insurance. No particularly large claims were recorded. Last year, after a seven-year growth, we became the biggest workers’ compensation insurer in Finland, and in April LocalTapiola and Seligson funds reaped success in a comparison conducted by Lipper, an esteemed and independent fund analysis company. Gross sales for our saving and investment services exceeded EUR 650 million, and net sales also increased to EUR 143 million.We Finns are exemplary in terms of preparing for surprising risks through insurance, but when it comes to increasing our wealth, we are still learning. In March, Statistics Finland produced new data on households’ assets, revealing that the majority of Finns became more impoverished between 2019 and 2023. In 2023, the net assets owned by the least well-off 40 per cent of Finns had dropped to just €6,000 per household. Against this background, the Government’s decision to abolish tax aid for voluntary retirement saving, which also encouraged those on low and middle incomes to save and which at best benefited more than 700,000 Finns, was short-sighted. The tools available to Finns for increasing their wealth should not be reduced; rather, they should be encouraged to use them. This is because it is easier to prepare for smaller risks and many life changes through saving and investment than through insurance.The impoverishment of households is explained particularly by house price developments, for homes and properties make up 60 per cent of Finns’ assets. The walls are located in Finland, in addition to which the majority of stocks we own are stocks in Finnish companies. Thus, the revenue from the assets of households is largely tied to how the Finnish economy develops, within the framework of which our pension system also operates. There are many eggs in the same basket.In investment, risk diversification is everything, and a clear area for improvement would therefore be to expand the current equity savings accounts into investment accounts and to enable, through them, investing in funds, which allow assets to be diversified easily, thereby evening out risk in the short and the long term. The increasing of wealth can also be promoted at workplaces, where personnel funds are gaining in popularity. At businesses that have introduced a personnel fund, they offer an easy way for ordinary working Finns to invest a portion of their bonuses with a long-term focus – while providing employers with an excellent means to commit their personnel. After its first year of operation, LocalTapiola Remuneration Services, which delivers remuneration solutions to businesses, manages a total of 31 personnel funds with some 30,000 members, and demand is growing rapidly. The investments of nearly all the managed funds are being administered by LocalTapiola Asset Management.The tools for increasing wealth are being underused, but rising wealth requires more than just tools. What we also need is economic growth. In labour productivity, the gap between Finland and our benchmark countries has swelled after the financial crisis, for which reason our purchasing power adjusted gross domestic product per capita has still not attained the peak level seen at the end of 2007. Fortunately, there are also positive signs bubbling under the surface. During and after the 2010s, a large number of innovative companies have been born in Finland which are now scaling their activities and recruiting more talents. Equally, the green transition, which relies on affordable and environmentally friendly electricity generation, provides impetus for growth in many parts of Finland.In politics, the wind is now blowing against sustainability commitments, but we do not recognise this trend in our customer base. On the contrary, Finnish companies have constantly increasing demands for us. At insurance companies, climate change is also not a political issue, but a stark reality. For us and, consequently, for Finnish businesses and households, heavy rain, flooding and storm damage have unfortunately already become everyday events. This development is continuing, while demand is increasing for solutions that mitigate climate change – whatever the direction in which the winds of politics are blowing, here or across the Atlantic.Furthermore, opportunities for growth are created by artificial intelligence (AI), and the strongly increased harnessing of AI is bringing into Finland not only data centres but also new types of and more efficient business activity. Companies and their staff need to keep pace with these developments, although the productivity gains arising from AI have not fully realised yet. AI is mainstreamed in all aspects of system development at LocalTapiola, and we have already trained a thousand of our employees in the use of AI. This allows us to expedite the processing of compensation applications, for example, in workers’ compensation claims, which by law must be processed and closed within a set timeframe. During the early part of the year, our insurance core system reforms, which we will be pursuing throughout the decade, progressed as planned, and in April we launched sales for our new motor insurance product in a new system.”Read the full financial statement presentation and business function-specific details here.

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