Finland’s Ilmarinen today reported a 4.8% return on investments in this year’s first quarter, while job cuts due to the pandemic caused pension contributions to fall to €1.4bn from €1.5bn in same period last year.
In its interim report, the firm – the largest of Finland’s employment pension insurance companies – also reported an increase in its solvency capital, rising to €13.9bn by the end of March from €12.5bn at the same point in 2020, with its solvency ratio climbing to 132.8% from 130.2%.
Jouko Pölönen, chief executive officer of Ilmarinen, said: “The number of employees at the customer companies in Ilmarinen’s business cycle index in March was 5.5% smaller than a year ago.”
He attributed the drop in premiums written in the first quarter of 2021 to the decline in employment caused by the pandemic, adding that this fall had been particularly sharp in the hospitality sector and in staff-leasing services.
Pölönen said Ilmarinen had become the most solvent of Finland’s four employment pension insurance companies last year.
The other three pension insurers reported their first quarter results this week, with solvency ratios for Varma, Elo and Veritas at the end of March published at 133.5%, 125.0% and 129.6%, respectively.
In today’s Q1 financial report, Ilmarinen said its total assets under management rose to €55bn by the end of the reporting period from €53bn 12 months before.
Of the asset classes in the investment portfolio, Pölönen said equities produced the strongest return of 9.1%, with fixed income returning 2%, real estate 0.8% and its “other investments” class ending the three-month period with a loss of 3.2%.
The CEO said that since 1997, the pension provider had generated a long-term average nominal return of 6% or 4.5% in real terms.
Ilmarinen’s 4.8% return in Q1 corresponds to €1.4bn in absolute terms, compared to the €2.5bn loss suffered in the first quarter of 2020, according to the report.