Finnish pensions insurance company Varma reported a 4.3% return on investments in the first half, down from 5.0% a year before, and warned that hidden exchange rate risk had returned to the euro following the crisis over Greece’s debt repayments.

In its interim report, Varma said its investment return was €1.7bn in absolute terms from January to June this year, down from €1.9bn in the same period last year.

Risto Murto, Varma’s chief executive, said: “A major change took place in principle in Finland this summer in relation to the shared currency area of the euro.”

He said the exit of a single country — in this case Greece — from the euro was now considered a possibility. 

“From an investor’s point of view, a hidden exchange rate risk has returned within the euro,” he said.

“In Finland’s case, this risk is still very minute, but it’s not nil,” he warned.

Varma said the equity and fixed income markets had been unsettled during the second quarter of the year, with the investment market plagued by three threats — rising interest rates, Greece and China.

These had added to difficulties in the already-challenged investment markets, said Varma’s CIO Reima Rytsölä.

Varma’s pension assets grew to €41.9bn at the end of June from €39.7bn, according to the report.

Written premiums rose to €2.26bn in the period from €2.19bn in the same period a year earlier.

Solvency capital increased to 35.3% of technical provisions at the end of June from 34.9% 12 months earlier.

Within asset classes, equities generated the highest returns, at 8.3%, compared to 7.2% a year earlier, and fixed income investments produced 0.3%, after 3.4% in the first half of 2014.

Property yielded 3.4%, up slightly from 3.2% in the comparable period, with other investments — including hedge funds — generating 4.0% compared with 5.2% in the same period last year.