The return on Veritas’ investments was 6.8 per cent in the fourth quarter of 2020, bringing the investment return for the whole year to 5.6 per cent. The good investment result strengthened Veritas’ solvency, which increased by the end of the year to 128.8 per cent. The number of YEL and TyEL insurance policies increased.
‘During February-March of last year, the coronavirus crisis caused one of the fastest declines in stock market history. The recovery that has begun as a result of stimulus measures has, however, been surprisingly strong’, says Kari Vatanen, CIO of Veritas.
Of Veritas’ investments, equity investments succeeded best, with a return of 9.1 per cent last year. The return on real estate investments was 6.8 per cent, fixed income investments 3.8 per cent and other investments -2.6 per cent.
‘Equity, fixed income and real estate investments achieved excellent returns despite the exceptional market conditions. Alternative investments were, on the other hand, a disappointment for us. Already during the spring, we reduced the share of hedge funds in our investment portfolio, because we didn’t anticipate that they would bring diversification within this market environment.’
Through active risk management, Veritas held its solvency at a good level throughout the various phases of the corona crisis. The solvency ratio increased during the final quarter to 128.8 per cent. The solvency capital was 1.9 times the solvency limit.
The tentatively positive sentiment continues in the financial markets
The sentiment in the financial markets has been tentatively positive at the start of this year. The market is keeping a close eye particularly on the progress of vaccination efforts and stimulus measures.
‘In the US, the stimulus measures are shifting from helicopter money to a more precisely targeted drone money so that the support would more accurately be distributed to the right places. Things are progressing more slowly in Europe. One might say that, here, the stimulus package is arriving by snail mail.’
As economic growth recovers, interest rates and inflation expectations begin to rise moderately.
‘The biggest uncertainty factors are, on one hand, the worsening pandemic situation and, on the other hand, faster than expected recovery as a result of the successful vaccination programme. There is a risk of overheating.’
Growing number of YEL customers
Veritas supported its customers throughout the difficult corona year. Early on in the crisis, the pension companies and the authorities prepared a ‘flexibility package’ which enables pension companies to grant customers payment extensions on the pension contributions for their TyEL and YEL insurance policies. ln addition, employers received a temporary reduction on their TyEL contributions for the period of 1 May – 31 December 2020. Veritas has also been flexible with tenants and offered its customers financing for different needs.
‘We have responded flexibly and rapidly to our customers’ need for financing,’ states Carl Pettersson, CEO of Veritas.
Last year, Veritas attracted new entrepreneur customers and, as a result, the number of YEL insurance policies increased. Pettersson believes that the personal customer advice offered by Veritas has been invaluable to entrepreneurs during these challenging times.
This year, Veritas will initiate co-operation with the Finnish Institute of Occupational Health. The aim of the co-operation is to improve the opportunities of particularly entrepreneurs and small businesses to maintain their work ability and minimise work ability risks.
‘We are concerned about the ability of entrepreneurs to cope at work. We want to do our part to support the work ability of entrepreneurs and employees and to prevent the incapacity for work’, Pettersson explains.
- Carl Pettersson, CEO, tel. +358 (0)10 550 1600, email@example.com
- Kari Vatanen, CIO, tel. +358 (0)10 550 1882, firstname.lastname@example.org
- Tommy Sandås, Financing Director, tel. +358 (0)10 550 1786, email@example.com