The investments of Pension Insurance Company Veritas returned 2.3 per cent in January–September. At the end of September, the solvency ratio was 121.6 per cent and the solvency capital was 1.5 times the solvency limit.
According to Carl Haglund, CEO of Veritas, the third quarter of the year was successful in terms of sales.
”I believe that many customers transfer their insurance policies to us because of our exceptional service model. All pension insurance companies offer the same YEL and TyEL insurances, but we are the only pension insurance company to provide our customers with a dedicated contact person,” Haglund explains.
According to forecasts, Finland’s economy will be in recession in the latter part of the year. The rise in prices and interest rates have reduced household consumption and business investments. Furthermore, there has been a clear increase in the number of bankruptcies.
”One of the underlying reasons for bankruptcies is the rapid increase in financing costs. It is a difficult situation for many companies,” says Haglund.
Equities weighed down by rising interest rates
The return on Veritas’ investments was 2.3 per cent for the period of January–September. The return on fixed income investments was 3.7 per cent, equity investments 3.2 per cent, real estate -2.5 per cent and other investments 3.3 per cent.
During the third quarter of the year, the return on investments was negative and stood at -0.2 per cent.
”The beginning of the year was positive for the equity market, but the rise in interest rates during the last few months has weighed on equities. The Finnish equity market is, however, a whole different story. The general index for the Helsinki Stock Exchange has declined 25 per cent from the previous index peak,” says Kari Vatanen, Chief Investment Officer at Veritas.
The outlook for the world economy is divided: In the United States, economic growth forecasts have been revised upward, but in Europe the situation is the opposite.
”Economic growth in Finland and northern Europe is suffering from the weakness of the export industry. Service-intensive economies, on the other hand, have performed better,” says Vatanen.
Vatanen is confident that Finland’s economy will start to grow again next year. However, he cautions that prolonged inflation, high interest rates and lower economic growth are not so easily overcome.
”In terms of the whole world, the outlook for international trade does not look too good. We are heading towards protectionism, which will mean permanently lower growth, higher inflation and decreasing world trade. Furthermore, corporate debt refinancing risks have increased along with the higher interest rates.”
Appendices:
Interim Report 1 January–30 September 2023 (pdf)
Further information:
- Carl Haglund, CEO, tel. +358 (0)10 550 1600, firstname.lastname@veritas.fi
- Kari Vatanen, CIO, tel. +358 (0)10 550 1882, firstname.lastname@veritas.fi
