The investments of pension insurance company Veritas returned 5.2 per cent in January-September and 3.2 per cent in the third quarter of the year. Veritas has continued to grow strongly during the year, and the premiums written are estimated to grow by almost 12 per cent this year.
“Last year was a record year of growth for us, and it looks like sales may edge even higher this year,” says Veritas’ interim CEO Tommy Sandås.
Veritas has gained many new customers, which is reflected in the growth of the total payroll.
“This year the total payroll of Veritas’ customers has grown by over 10 per cent compared to last year. In the private sector, total payroll growth has remained at two per cent.”
According to Sandås, the total payroll is influenced by overall employment trends.
“Unemployment has increased and the employment rate has weakened, which is reflected in the modest growth of the total payroll. However, the employment rate has remained at a relatively good level compared to, for example, the early 2000s.”
Equity investments generated the best returns
The return on Veritas’ investments was 5.2 (6.7) per cent in January-September. The return on fixed income investments was 2.5 (5.3) per cent, equity investments 8.5 (10.4) per cent, real estate 2.2 (1.1) per cent and other investments 2.1 (4.4) per cent. The value of investments exceeded EUR 5 billion for the first time.
“Equity investments generated the best returns in the third quarter and the performance of U.S. equities continued to be strong,” says Veritas’ Chief Investment Officer Laura Wickström.
According to Wickström, uncertainty surrounding tariffs began to ease during the second quarter, after which equity markets have continued to climb. In the United States, the main indices have reached record levels.
“The performance of European equities remained muted in the second quarter, but the current earnings season has already brought some positive surprises.”
There are high expectations for Europe, mainly due to Germany’s expansionary fiscal policy. Economic growth in Europe is expected to pick up next year, narrowing the gap with the United States.
In the U.S., recent weak employment figures have dampened the outlook, but the interest rate cuts initiated by the Federal Reserve have been very welcome news for the stock markets.
“Markets expect further rate cuts ahead. This would in turn support both equity markets and economic growth.”
Interest rate cuts help to curb debt-related interest expenses. However, debt accumulation is not a solution to the underlying problems, Wickström notes.
“In October, we have seen the political consequences of government indebtedness and how difficult it is to cut public spending. The U.S. government shutdown and the political crisis in France are both examples of this. The problems caused by excessive debt could also escalate in Finland if economic growth is not restored.”
Appendices:
Further information:
- Tommy Sandås, Interim CEO, Chief Financial Officer, tel. +358 10 5501 786, firstname.lastname@veritas.fi
- Laura Wickström, Chief Investment Officer, tel. +358 44 209 7498, firstname.lastname@veritas.fi
The comparative figures in brackets refer to the corresponding period of the previous year.
