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The value of Varma’s investments exceeded EUR 60 billion for the first time ever thanks to good equity returns. Of Varma’s investments, US equities performed the strongest in January–March. The globally recognised business sustainability rating provider EcoVadis awarded Varma’s sustainability practices with the Platinum Medal.
The return on Varma’s investments in January–March was 3.6 (1.0) per cent. The value of Varma’s investments was EUR 60.9 (59.1 on 1 Jan) billion.
“From an investor’s perspective, the first quarter of 2024 has been good. Equities have performed favourably for five months now, starting at the end of last year. Unfortunately, however, there has been no change for the better in the Helsinki stock exchange. Interest rates are expected to fall in the eurozone, which will eventually bring relief to Finland’s economy too,” states Varma’s President and CEO Risto Murto.
Varma’s return on equities stood at 5.3 (2.0) per cent, while US equities yielded 11.4 per cent. Hedge funds yielded 3.9 (-1.1) per cent, private equities 3.0 (0.7) per cent, and fixed income investments 1.0 (1.2) per cent. The return on real estate investments was -0.7 (-0.8) per cent.
“The weight of equities in the portfolio was increased at the end of the year, and the return on equity investments has further reinforced our already strong solvency. The global economy is currently characterised by the appeal of the US over other economies. Europe is preparing for interest rate cuts, but the US is not under the same pressure to cut rates. Interest rates have started to diverge,” says CIO Markus Aho.
Varma’s solvency ratio at the end of March was 132.2 (130.4 on 1 Jan) per cent, and solvency capital was EUR 15.1 (14.0 bn on 1 Jan) billion. Varma’s solvency capital was 1.6 times (1.6 on 1 Jan) the solvency limit.
Varma ranks in top 1% for the third time in EcoVadis sustainability assessment
The business sustainability rating provider EcoVadis rated Varma’s sustainability practices as excellent in an independent global comparison. Varma ranked in the top 1% of the more than 100,000 companies analysed and was awarded the Platinum Medal for its results.
Varma’s climate allocation accounted for 37 per cent, i.e. EUR 21.9 billion, of Varma’s investment portfolio at the beginning of the year 2024. In Varma’s 2023 Annual and Sustainability Report that was published in March we report in more detail on our key operational results and sustainable actions in relation to pension cover, investments and sustainable working life.
The increase in life expectancy has extended the pension periods of Varma’s pensioners
The pension periods of pensioners have become longer as a result of the rise in life expectancy. At the end of March, Varma had 325 pension recipients who had reached the age of 100. Of those pensioners, 286 were women. The longest some of Varma’s pensioners have been receiving old-age pension is more than 40 years.
Partial old-age pension remained a popular pension benefit. Partial old-age pension applications increased 94 per cent compared to the same period last year and totalled 1,519.
YEL income reviews continue this year
Varma is continuing its income reviews this year in accordance with its obligations under the Self-Employed Persons’ Pensions Act (YEL). Varma is reviewing the YEL income of entrepreneurs whose income is set at between EUR 15,000 – 25,000. Varma insures just under 8,000 entrepreneurs whose YEL income falls within that range.
The TyEL payroll of Varma’s client companies grew 3.9 per cent in January–March compared to a year ago. The payroll growth remains at a good level, despite slowing down since last year.
Varma succeeded well in customer acquisition in January–March. In the transfer rounds between earnings-related pension insurance companies at the start of the year, EUR 129 (31) million in net annual premiums written is being transferred to Varma. Sales of pension insurance policies to new customers during the reporting period amounted to EUR 23 (40) million.
Varma Mutual Pension Insurance Company is a responsible and solvent investor of pension funds. The company is responsible for the statutory earnings-related pension cover of 941,000 people in the private sector. Premiums written totalled EUR 6.5 billion in 2023 and pension payments stood at EUR 7.1 billion. The company’s investment portfolio amounted to EUR 60.9 billion at the end of March 2024.
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