Working together.
We are the proven no. 1 pension company in Finland – our customers have rated our service as the best in the field for 4 years in a row. *
* Taloustutkimus field-specific customer satisfaction survey 2017.
Carl Pettersson,
CEO
Dear reader,
The year 2017 was, in many ways, a year of change for Veritas. I was given the opportunity to take the reins as the company CEO after Jan-Erik Stenman, who successfully held the position for nearly 14 years. During Jan-Erik’s term, the company has grown and developed to new proportions both in terms of customer satisfaction and the yield from investment operations.
As a result of this legacy, I have the honour of heading up an extremely well-managed company. The foundations of the operations are stable, thanks to our strong solvency, high customer satisfaction, competent personnel and strong administration. At the same time, however, the trend for development in the pension industry has been characterised by an increased emphasis on size and efficiency. This has presented Veritas with new types of challenges.
Following the summer, we initiated, together with the Board of Directors and our personnel, a strategic process with the aim of defining a vision for the company. On the basis of this shared vision for the next few years, we have generated a road map to clarify our path for the future.
Our objective is clear. Veritas will be the best employment pension company for self-employed persons and companies run by entrepreneurs. This is the goal that drives everything we do. All of the mergers that have taken place in the industry have resulted in us being the smallest employment pension company on the market. Our small size enables us to be more flexible and have a more personal approach than the others.
At the same time, we must also ensure cost efficiency and competitiveness. Increased cost efficiency means that we will be able to pay our customers better client bonuses and to invest more in the development of our services. The guiding star for the next few years will be strict cost management combined with growth.
On 17 April 2018, we announced our plans to merge with Pensions-Alandia. Our companies have already been working co-operatively for more than 50 years, but now it’s time to take the next step. The merger will improve our cost efficiency and strengthen our possibilities to develop our services. Furthermore, our customers will draw advantage from the improved client bonuses. Before the merger plan can be set in motion on 1 January 2019, it must be approved by the Annual General Meetings of both companies and also by the relevant authorities.
Veritas’ investment operations have resulted in good returns over the years, and 2017 was no exception. All the employment pension companies made a good return on their investments last year, but we can proudly state that Veritas’ result was the best in the market after Pensions-Alandia. This good return on investments further strengthens our solvency and benefits our customers through increased client bonuses. A high solvency reinforces our foundations and creates an excellent basis for meeting the challenges of the future.
When the national newspaper, Helsingin Sanomat, recently reported on the results in the pension industry, they referred to Veritas as competing in the flyweight series. Although this type of classification may seem unfair and inaccurate at first glance (since, despite our size, we are regulated by the same demands as our bigger competitors and our result is measured by the same standards), we have decided to turn this to our benefit. Approximately 94 per cent of all Finnish companies employ less than 10 employees. Often, these companies are run by an entrepreneur, who values easy and convenient services. They definitely want to spend more of their precious time on aspects of their company other than the management of pension matters. Entrepreneurs appreciate co-operative partners who speak their language and understand the needs of a small company. Veritas endeavours to be precisely this company for our current and future customers. If that means wrestling in the flyweight series, then that’s what we’ll do!
I wish to express my gratitude to our fantastic Veritas personnel for their amazing work in 2017. The devotion and commitment I have encountered in this organisation will surely carry us far in the coming years! I would also like to thank our customers. We are here for (and because of) you, since a company is only as strong as its customer base. I thank you for your confidence now and in the future!
Turku, Finland April 2018
Carl Pettersson
Key figures for 2017
The TyEL insurance portfolio strengthened slightly in 2017. Both the number of TyEL insurance policies and the TyEL payroll amount also increased. The number of YEL insurance policies decreased slightly. The premium income increased by 2.4 per cent to 520.9 million euro.
The number of pension recipients continued to grow. In 2017, Veritas paid pensions to 31,206 recipients.
In terms of the overall investments, 2017 was an extremely strong year with Veritas’ investments bringing an excellent return of 8.0 per cent. Our customers also gained benefit from the good result, which was reflected in an increase of 20 per cent in customer bonuses for a total of 8.6 million euro
| 2017 | 2016 | % | |
|---|---|---|---|
| Premiums written, EUR mill € | 520,9 | 508,9 | 2,4 |
| Pension and other payments made, EUR mill 1) | 489,9 | 486,1 | 0,8 |
| Net investment income at current value, EUR mill | 236,7 | 190,9 | |
| ROCE, % | 8,0 | 6,6 | |
| Total investments, EUR mill | 3 175,2 | 2 928,1 | |
| Total profit, EUR mill | 107,9 | 79,0 | |
| Operating expenses covered by expense loading components included in contributions EUR mill | 17,8 | 18,2 | |
| Operating expenses as a percentage of loading profit 2) | 96,3 | 91,7 | |
| Average number of personnel | 152 | 149 | |
| Technical provisions, EUR mill | 2 730,1 | 2 493,4 | |
| Solvency capital, EUR mill | 778,5 | 681,6 | |
| Pension assets in relation to technical provisions 3) | 131,6 | 129,5 | |
| Solvency capital in relation to solvency limits | 2,2 | 2,6 | |
| Pension assets, EUR mill 4) | 3 241,9 | 2 984,0 | 8,6 |
| Transferred to client bonuses, EUR mill | 8,6 | 7,1 | 20,4 |
| % of Employees Pensions Act payroll incl. portion of co-insurance | 0,45 | 0,38 | |
| Employees Pensions Act payroll, EUR mill | 1 708,8 | 1 692,5 | 1,0 |
| Self-Employed Persons Pensions Act payroll, EUR mill | 241,7 | 252,5 | -4,3 |
| Employees Pensions Act policies | 7 315 | 7 134 | 2,5 |
| Insured under Employees Pensions Act | 54 960 | 56 503 | -2,7 |
| Self-Employed Persons Pensions Act policies | 10 265 | 10 457 | -1,8 |
| Pension recipients | 31 206 | 30 351 | 2,8 |
¹ Payments made and recorded in the income statement, without management charges and work capacity maintenance expenses.
² Expense loading ratios are not directly comparable. The expense loading component of the pension contribution was reduced at the start of 2017 by approximately 7 per cent in comparison to the previous year.
³ Pension assets in relation to technical provisions according to Section 11, Paragraph 10 of the Ministry of Social Affairs and Health’s decree governing pension institutions (614/2008).
⁴ Technical provisions (in accordance with Section 11, Paragraph 10 of the Ministry of Social Affairs and Health’s decree governing pension institutions, 614/2008) + solvency capital. Technical provisions + differences between current and book values in 2016.