FINLAND - A diversified investment strategy allowed Varma Mutual Pension Insurance Company to achieve returns of 5.8% despite stock market volatility in the second half of 2007.
Preliminary figures from Varma's annual accounts estimate the total earnings at €400m, down from €1.12bn in 2006, while the value of investments increased from €26.9bn to €28.4bn.
The investment return of 5.8% was almost half of the 9.4% achieved in 2006, but Varma claimed the performance was "reasonable" given the market situation and suggested a less diversified investment strategy could have significantly affected returns.
In addition, the figures show both customer and business volumes increased as 9,900 new pension policies came into force, and the number of insured and self-employed members rose by 21,000. Varma also revealed it now services more than 300,000 pensioners.
As a result, Matti Vuoria, president and chief executive of Varma, said the firm plans to pay more attention to customer benefits and will be investing in online services to improve efficiency and the quality of service as in the last year it paid out more than €3bn in pension payments.
"In view of the challenging market situation, Varma's performance was reasonable, although the high returns of recent years were not reached. The effect of the end of the year was balanced out markedly by Varma's strategic policy of diversifying investment assets outside the traditional equity and fixed-interest markets," Vuoria added.
The group is Finland's largest earnings-related pension insurer and investor and is currently responsible for providing earnings-related pension cover for more than 780,000 members.
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