Veritas’ Interim Report 1 January – 30 September 2022: Investments generated positive return in the third quarter

28 October 2022

In the third quarter of the year, Pension Insurance Company Veritas’ investments generated a return of 0.5 per cent amidst the challenging market environment. Solvency remained at a solid level and was at the end of September 1.7-fold compared to the solvency limit.

”From the perspective of sales, the past two years have been successful and this enables growth also going forward. In YEL insurance policies, we are already approaching the threshold of 15 000 policies,” says Veritas’ Chief Executive Officer Carl Haglund.

Veritas’ premiums written increased by 16.3 per cent between January and September compared to the reference period in the preceding year. The premiums written for the entire year are expected to exceed EUR 700 million.

”The total payroll of Veritas’ customer companies has increased during the year approximately 50 per cent faster than the industry average.”

Positive returns in the third quarter

The return from Veritas’ investments in January through September amounted to -6.2 per cent. Fixed-income investments generated a return of -8.2 per cent, equity investments -12.6 per cent, real estate investments 3.9 per cent and other investments 12.9 per cent.

In the third quarter, investments generated a return of 0.5 per cent, even though the equity market has been declining.

”The decline of listed shares has persisted, but alternative investments have generated positive returns in our investment portfolio,” says Veritas’ Chief Investment Officer Kari Vatanen.

According to Vatanen, the market environment is constantly deteriorating.

”The outlook for the economy and the investment market continues bleak. Economic growth expectations have been gradually decreased throughout the first part of the year, and most likely, the eurozone is already in a recession,” assesses Vatanen.

Employment in the United States has remained strong and this has not only supported the economy, but also the rise of core inflation. In the euro area, the effects of the war are reflected in the surging energy and food prices.

Central banks are continuing to combat inflation through tightening monetary policy, which translates into a rapid increase in market interest rates.

”In recent years, the accommodative monetary policy of central banks has provided tailwinds for the equity market, but those tailwinds are now turning into headwinds.”

Forthcoming index increase reflected in the number of pension applications

The number of applications for old-age pensions and partial old-age pensions has been markedly above average in September. At the turn of the year, pensions will be adjusted with the earnings-related pension index, and the increase will be exceptionally high this year.

”The increase in the pension index favours those retiring this year. In September, the number of applications exceeded last year’s number by 108 per cent,” Haglund reports.

The number of disability pension applicants, on the other hand, decreased during the year. The number of decisions made by the end of September amounted to 13 per cent less than in the preceding year.

”Mental illnesses are currently the most common cause of disability pensions. They are particularly accentuated in young people’s disability pensions”, says Haglund.

Commendable efforts have been exerted in Finland into developing occupational safety, and matters jeopardising physical working ability are well under control.

”Workplaces should now afford equivalent attention to promoting mental health, so as to reverse this development direction. This is something that needs to be taken seriously.”

Source: Veritas
Multiple reports with cicle diagram and text

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