FINLAND – Varma, Finland’s largest private sector pension insurer, says it made a 6.7% return on its investments in the first half of 2005 – but the number of people insured declined slightly.

It said its investments produced a yield of €1.44bn, compared to €637m a year before. The market value of its investments has risen to €23bn from €21.2bn at the end of 2004.

“The return on capital invested contributed to a good result for the first half of the year,” said chief executive Matti Vuoria.

“Despite the challenges related to the aims and execution of the Finnish pension reform, we improved our efficiency and operations.”

However, Varma revealed that the number of people it insures fell slightly, to 438,000 from 441,000 12 months ago. It said: “The decrease was due to the cuts in personnel numbers in Varma’s client companies.”

Premium income was € 1.4bn and is estimated to rise to €2.75bn. Varma handled 16% more new pension applications than during the 2004 period.

Market appreciation means equities now account for 31% of its portfolio, a rise of five percentage points.

Varma saw an “extremely challenging” outlook. It said: “After more than two years of positive development in the investment market, it is extremely challenging to maintain the current level of revenues, considering the international economic and political factors contributing to uncertainty and insecurity.”

Earlier this year Varma separated its investment and supervisory functions and replaced its risk management committee.