Finland’s second largest pensions insurer Ilmarinen recovered from early losses to report 4.8% in overall investment returns for 2016.

The return was lower than 2015’s 6% gain, with European equities a drag, according to Timo Ritakallio, president and chief executive of Ilmarinen.

“The Brexit referendum and the US presidential election fuelled political uncertainty, causing stock price volatility,” Ritakallio said. “Against this challenging backdrop, we reached a reasonably good investment return.”

Ritakallio said the “good” full-year result was attributable to Ilmarinen’s long-term investment strategy, as well as diversifying investments both geographically and across various asset classes.

“During the year, we reduced fixed income investments and increased investments in real asset classes,” he said. “We continued to diversify our real estate investments abroad and invested in new properties in Frankfurt, Berlin and Amsterdam, among other places.”

The market value of Ilmarinen’s portfolio rose to €37.2bn by the end of December, from €35.8bn a year earlier.

Equities were the best performers among the main asset classes despite market volatility, Ilmarinen reported, returning 6.5%.

Investments in listed Finnish equities returned more than 15% in 2016, Ritakallio said, adding that US and emerging economy equities had also performed well.

“However, investments in other European equities and shares lowered the overall return on the equity portfolio,” he added.

Solvency capital was 29.2% of the technical provisions in 2016 compared to 29.6% the year before, and the solvency position remained at two times the solvency limit.

Ritakallio also said implementation of Finnish pension reform had got off to a smooth start at the company.

“It will be interesting to see how the reform will impact retirement in the long run and how Finns will make use of the new pension types,” he said.