FINLAND - Varma Mutual Insurance Pension Company saw its assets increase to €29.9bn by the end of 2009 after securing a number of new pension contracts from the university sector.

Preliminary figures from the pension company revealed the return on investments for the year was 13.9%, compared to -15.2% in 2008, while the solvency position of the fund improved to €5.9bn of capital, or 24.6% of technical provisions, which is 2.7 times the minimum solvency requirement.

Matti Vuoria, president and chief executive of Varma, said the firm's main focus at the start of 2009 was securing the company's solvency and prudent risk policy. 

"As the year progressed we increased equity investments, in particular, and we cancelled some of the hedges on our investments. Under these circumstances, we are very pleased with the development of our investment income and the improvement in our solvency," added Vuoria.

The figures highlighted the value of assets had increased from €24.6bn at the end of 2008 to €29.9bn a year later, while the firm also strengthened its market position with a number of new earnings-related pension contracts.

This is because several big companies, including VR State Railways, moved the handling of their statutory earnings-related pension cover from pension funds to pension insurance companies, while Finnish universities also tendered the management of their earnings-related pensions in 2009 as a consequence of the new Universities Act. (See earlier IPE articles: Kesko becomes latest corporate to transfer pension and Finnish railways pension follows outsourcing track)

"With five pension funds and all Finnish universities concentrating their earnings-related pension insurance on Varma, the company's market position was strengthened considerably," said the firm in its preliminary results.

Data released ahead of the full figures in February showed premium income in 2009 totalled €3.4bn, while pension payments stood at €3.6bn. The firm also noted that on the basis of the preliminary figures it will transfer around €60m to pay client bonuses.

Vuoria added: "Our strong solvency position, good investment and new customers will provide a good springboard for our operations in 2010."

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