The investments of Pension Insurance Company Veritas returned 8.1 per cent in January–September. At the end of September, the solvency ratio was 127.4 per cent and the solvency capital was 1.7 times the solvency limit.
“Veritas strong investment performance continues, further strengthening our solvency and also benefiting our customers through improved client bonuses,” says Veritas CEO Elina Foglholm.
“It is particularly encouraging that Veritas’ excellent investment returns are underpinned by our confidence in the Finnish investment market. 25.8 per cent of all our investments and 24.8 per cent of our equity holdings are invested in Finland.”
“The outlook for the Finnish economy is exceptionally positive, as major global trends such as the energy transition, data centers and the defence industry are driving the export sector while also supporting domestic investment.”
In addition to investment returns, pension insurance companies compete on efficiency and service, and Veritas is continuously developing its operations in these areas as well.
“We have launched a transformation process driven not only by the need to improve efficiency, but also by our ambition to develop our processes and free up more time for proactive customer service.”
“Our customers will continue to receive personal service and have their own dedicated contact person, while the processes behind the scenes will become faster. By investing more in development, we will also be able to offer our customers new services,” says Fogelholm.
Equity investments delivered the strongest returns
The return on Veritas’ investments was 8.1 (5.2) per cent in January–September. The return on fixed-income investments was 0.9 (2.5) per cent, equity investments 13.2 (8.5) per cent, real estate investments 1.2 (2.2) per cent and other investments 6.8 (2.1) per cent. The value of investments stood at EUR 5.6 (5.5) billion at the end of September.
Equity investments delivered the strongest returns in the third quarter. Despite the rise in interest rates in September, equities have retained their value. This is partly because the increase in interest rates has been driven by expectations of strong economic growth, which supports equity markets.
“Equity valuations have become more moderate due to accelerating earnings growth and higher expectations for future earnings growth,” says Chief Investment Officer Laura Wickström.
Geopolitical uncertainty continues
Geopolitical uncertainty continues, and the ongoing war in Iran has caused volatility in investment markets.
“In addition to increasing uncertainty, the situation in the Middle East affects investment markets through factors such as energy prices. Higher energy prices increase companies’ costs, which in turn are also reflected in consumer prices.”
“AI investment is now growing rapidly and requires capital. Previously used internal financing is no longer sufficient, and data center projects have begun to be financed with debt,” Wickström says.
This has contributed to upward pressure in fixed-income markets. The rise in interest rates seen in September was substantial and occurred particularly rapidly.
A prolonged rise in interest rates may also weaken economic growth. Higher debt-servicing costs increase indebtedness and further aggravate public-sector deficits in particular.
The situation is especially evident in France, where sovereign bond spreads have widened considerably.
“France has emerged as a new market risk in the euro area, and the yield spread between Germany and France has widened to record levels. The reasons are France’s growing budget deficit, political uncertainty and the approaching presidential election.”
Appendices:
Further information:
- Elina Fogelholm, CEO, tel. +358 (0)10 550 1600, firstname.lastname@veritas.fi
- Laura Wickström, CIO, tel. +358 (0)44 209 7498, firstname.lastname@veritas.fi
‘The comparative figures in brackets refer to the corresponding period of the previous year.
