FINLAND - Two more Finnish pension companies have reported negative returns for the first nine months of 2008, as Veritas Pension Insurance confirming a saw a negative investment return of -10% to the end of September.

Tapiola Pension revealed it had performed slightly better albeit there was still an overall negative return of -5.6% between 1 January and 30 September 2008 - relatively good considering the scheme suffered a -25% return on its equity investments.

Figures from Tapiola showed the value of the pension company's investments fell from €7.87bn to €7.56bn over the nine-month period, as losses were limited by positive returns on its fixed income investments, which yielded 2%, as well as a 2.6% return on real estate and 3.5% from other investments.

Satu Huber, managing director of Tapiola Pension, said: "The result can be considered tolerable when taking into account the financial crisis impact on the market conditions. Our investment allocation is very risk conscious."

Tapiola also confirmed its risk solvency level at the end of September was 11.1%, equivalent to 1.4 times the solvency limit, although it noted if the temporary solvency rules proposed by the Finnish Government come into effect, they would increase the solvency ratio to more than 20% and its solvency position to three times the limit.

Figures from Veritas Pension Insurance, meanwhile, were less positive as it revealed the negative return on investment between January and September was -10%, and the value of its portfolio had dropped from €1.86bn to €1.75bn.

Jan-Erik Stenman, managing director of Veritas, said: "The fiscal crisis has impacted on us like other industry players. We have not significantly reduced the stock allocations, which has affected the result. We invest over the long term. Our starting point was good, however, and the five-year average return was 6.5%."

Veritas claimed its solvency situation remains at a "satisfactory level", with its capital adequacy ratio reaching 14.9% at the end of September, which is 1.4 times the solvency limit.

Similarly, the pension insurance company said if the Finnish government implements the new solvency requirements, the solvency position would improve to three times the minimum requirement.

Stenman added: "Although the economic development in Finland is now slowing down, I see the Veritas pension has a stable and a good basis for continued profitable growth."

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