The investments of pension insurance company Veritas returned 1.9 per cent in January-June and 2.2 per cent in the second quarter of the year. Growth continued strong in the early part of the year, and Veritas’ premiums written are estimated to grow by over 12 per cent this year.
“We have gained many new customers, which is reflected in the strong growth of the payroll sum. The payroll sum of Veritas’ customers grew by over 12 per cent in January-June compared to last year,” says Veritas’ interim CEO Tommy Sandås.
“The growth of the payroll sum in the private sector remained at only two per cent in the early part of the year, mainly due to the weakening of employment. The unemployment rate rose to over 10 per cent in April-June.”
According to Sandås, the difficult economic situation and the increase in the number of bankruptcies have not gone unnoticed in pension companies. However, there are already signs of improvement in the economy.
“Industrial orders have returned to growth, which is positive news. Consumer confidence also improved slightly in July, although it is still at a weak level. Therefore, the recovery of consumer demand will likely take some time.”
Finnish equities have performed well
The return on Veritas’ investments was 1.9 (5.2) per cent in January-June. The return on fixed income investments was 0.9 (2.7) per cent, equity investments 3.2 (8.9) per cent, real estate 1.8 (0.9) per cent and other investments 0.3 (3.5) per cent. The value of investments was EUR 4.9 (4.6) billion at the end of June.
“Finnish equities have performed very well this year. Valuation levels were low at the beginning of the year, and especially the performance of the engineering sector has been strong,” says Veritas’ Chief Investment Officer Laura Wickström.
The second quarter started amid market turmoil but ended on a positive note with positive quarterly returns. According to Wickström, the markets have learned to live with the unpredictability of US President Donald Trump, and his statements no longer provoke as strong reactions as before.
“During the spring, growing concerns about the decline of American exceptionalism led investors to reallocate capital to alternative markets. However, the situation has changed as trade negotiations have progressed, with U.S. equities benefiting and continuing to benefit from the United States’ strong negotiating position.”
Inflation figures have been more moderate than expected in the US and Europe but import tariffs and the uncertainty associated with them overshadow the long-term outlook. According to Wickström, it remains to be seen how the increased tariff levels will affect the real economy and inflation in the long term.
“The markets consider it likely that the US Federal Reserve will lower the key interest rate in September. However, accelerating inflation may delay or prevent the Fed from lowering interest rates.”
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
