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Varma retains top spot in Finland as Ilmarinen-Etera merger nears

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Varma and Ilmarinen, the two largest pension insurance companies in Finland, are almost neck-and-neck in terms of assets under management following the latter firm’s acquisition of Etera, third-quarter results have shown.

Ilmarinen is to merge with the smaller pensions insurer Etera at the beginning of next year, in a move which is closing the gap between the two earnings-related pension giants.

At the end of September, Varma reported its investment portfolio had reached a market value of €45.4bn, while Ilmarinen revealed its assets had grown to €38.9bn.

Interim figures released by Etera, meanwhile, showed its investments were worth €6.3bn at the end of the third quarter reporting period.

This means the combined assets of Ilmarinen and Etera were €45.2bn – just €200m less than Varma’s total pot.

In the third-quarter results, Varma reported an investment return of 6.2% between January and September – gaining €2.7bn – up from 3.1% in the same period in 2016.

Meanwhile, Ilmarinen generated a return of 5.5% on its investments. Etera reported a 4.4% return on its investment portfolio, up from 3.6% in the same period last year.

Varma said in its interim report that it had done well in the latest round of account transfers between earnings-related pension companies, concluded at the end of September.

According to the statistics of the Finnish Pension Alliance TELA, the contributions to be transferred to Varma totalled €48m.

The figures published by TELA showed that Ilmarinen and Etera both suffered net transfers out in the period, of €17.5m and €15.5m respectively.

Risto Murto, Varma’s president and chief executive, said: “Varma’s financial situation has further improved this year. Our solvency and investment assets are at a record high level.”

He said the successful transfer round had supported an increase in premium income, amounting to €200m in the past five years.

However, Ilmarinen said its customer acquisition had been “excellent” in the third quarter of this year.

“Measured in premiums written, net customer acquisition was €96m since the beginning of the year,” the company said.

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