Varma’s financial trends

Varma’s total result at fair value stood at EUR 1,558 (1,201) million. The total quarterly result varied during the financial year, such that the first-quarter result was the strongest and the second-quarter result the weakest. Varma’s financial performance in the second half of the year was good.

Solvency regulations changed at the beginning of 2013. The change did not affect Varma’s solvency position.

Varma’s solvency strengthened during 2013 by EUR 1,424 million, and at the end of the year, solvency capital amounted to EUR 9,140 (7,716) million. Varma’s solvency ratio, i.e. solvency capital in relation to technical provisions, is the highest among the main earnings-related pension companies, at 31.6 (28.0) per cent. Solvency capital was at a strong level: 2.2 (2.4) times higher than the solvency limit. The solvency limit is changed in accordance with the risk level of the investments. Varma’s strategic goal is to maintain the company’s strong solvency through stable returns and operational efficiency.

The return on investments was EUR 3,160 (2,492) million at fair value, which was 9.0 (7.7) per cent of the invested capital. The interest credited on the technical provisions was EUR 1,648 (1,303) million. Thus, the investment result for 2013 totalled EUR 1,512 (1,189) million. The average annual nominal return on Varma’s investments over five years was 7.8 per cent, and over ten years 5.6 per cent. Operating expenses were 24 (16) per cent lower than the expense loading included in insurance contributions, and the loading profit stood at EUR 32 (21) million. The underwriting result was EUR 15 (-9) million.

At the end of 2013, EUR 105 (78) million was transferred to the provision for current bonuses for client bonuses. The transfer represents roughly 0.6 (0.4) per cent of the estimated payroll of the insured.

The TyEL payroll of those insured by Varma totalled about EUR 17.8 (17.7) billion in 2013. The payroll is estimated to have stayed at the same level as the actual 2012 figure. Varma’s premiums written totalled EUR 4,258 (4,230) million, of which TyEL insurance accounted for EUR 4,071 (4,041) million and YEL insurance for EUR 187 (190) million.

At the end of the year, 531,210 (539,740) individuals were insured by Varma. The number of valid insurance policies totalled 66,740 (68,900), covering 39,810 (41,280) self-employed persons and 491,400 (498,500) employees.

During the year, a total of 3,796 (3,881) new TyEL insurance policies and 5,340 (5,782) YEL insurance policies came into force at Varma.

Earnings and employment notifications received during the year totalled 1,483,634 (1,476,812), of which 92 (90) per cent were received electronically.

Varma observes good insurance principles. All business transactions with policyholders are on market terms. Particular attention is paid to transactions covering the financing of a policyholder’s operations, real estate and other transactions, and leases. At Varma, business transactions related to pension insurance or investments are carried out independently. When acquiring new assets in connection with client transfers, Varma is mindful not to infringe on the previous insurance portfolio.

Varma provides policyholders with services through its own service channels and through the service networks of If P&C Insurance Ltd and the Nordea Group.

In 2013, a total of EUR 4,490 (4,222) million in pensions was paid out. The number of pension recipients increased, and at year-end, Varma was paying TyEL and YEL pensions to 333,762 (331,383) people.

A total of 23,937 (22,031) new pension decisions were made during the year. The number of new pension decisions increased 8.7 per cent and the total number of all pension decisions was 3.1 per cent higher than in 2012. Old-age pension decisions numbered 11,514 (10,229), and 5,461 (5,457) disability pension decisions were made. Part-time pension decisions increased and stood at 1,052 (842). Continuation decisions on temporary pensions totalled 5,871 (5,653), and other decisions numbered 13,131 (13,960). These were decisions required as a consequence of the changes in pension rights.

Vocational rehabilitation is an alternative to disability pension, and the number of rehabilitation cases at Varma increased again. Rehabilitation has proven to be successful, as currently roughly 72 per cent of those who receive Varma’s rehabilitation return to the job market either in full or partly. Varma has for years been a forerunner in vocational rehabilitation. Throughout 2013 Varma assisted its client companies in managing personnel risks through client-oriented co-ordination of well-being-at-work services, rehabilitation services and pension-decision services in order to support the management of pension costs and longer careers. Varma also contributed to the costs of customers’ workability management projects in accordance with jointly agreed and often multi-year plans and contracts.


31 Dec. 201331 Dec. 2012Change
Number of insured
TyEL 1 491,400498,460-7,060
1of which covered by TEL registered supplementary pension insurance4,9285,545-617
Number of insurance policies
Number of pensioners
Part-time pension3,3203,986-666
Survivors’ pension51,42751,487-60
Disability pension33,32436,195-2,871
Unemployment pension38408-370
Old-age pension230,249223,9996,250
Early old-age pension15,40415,30896
Total 2333,762331,3832,379
2Those receiving YEL pension29,15328,969184
Those receiving TEL/YEL supplementary pension43,28642,797489

Varma’s customer service has seen a considerable increase in the use of the company’s online services. During the year under review, 74.5 per cent of all private customer contacts took place online. Pension recipients are able to update their address and account number information themselves by logging in using their Finnish personal banking codes. Through Varma’s eServices, the insured can obtain the most recent estimate of their old-age and part-time pensions at various retirement ages, apply for a pension, and follow the progress of the application.

Varma sends a pension record to the insured once every three years. 235,287 (574,149) such pension records were sent out in 2013. The record shows information on earnings that apply to pension as well as the pension that has accrued until the end of the preceding year. The pension record is also available in electronic form via Varma’s eServices.