FINLAND - Pension Fennia has reported investment returns fell more than four percentage points to just 4.1% in 2007, following continued instability in the equity markets.

Preliminary figures from the €5.6bn mutual insurance company revealed the returns from investment operations, before operating expenses, were much lower than the 8.3% return in 2006, but Lasse Heiniö, managing director of the firm, said in such a challenging market the results were "satisfactory".

That said, the figures showed a 20% increase in the number of employees insured under the employees' pensions act (TyEL) to total 163,000, while the number of YEL policies for self-employed members increased 6% to nearly 32,000.

In addition, preliminary financial information revealed Pension Fennia's solvency margin also fell slightly from 25.7% in 2006, to 22.5% at the end of 2007, however Heiniö pointed out because investments are focused on being long-term, yearly variations in the level of returns is "part of the nature of operations".

Heiniö added: "Considering the challenging situation on the investment market, Pension Fennia's result can be said to be satisfactory. Especially as the restlessness and instability on the equities market in the last quarter was also reflected on investment income."

Pension Fennia, part of the Fennia Group, covers just over a tenth of employees insured under TyEL and entrepreneurs insured under YEL, with a particular focus on small-to-medium employers.

The firm will publish its full-year 2007 results on March 7 2008.

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