Outlook

I would like to thank my predecessor, Matti Vuoria, for his significant contribution to Varma. Matti Vuoria became CEO of Varma in 2004, and under his leadership the company strengthened its position and developed into the strongest player in the sector. Good work, Matti!

The Finnish economy faces major challenges, and we have to take a pragmatic approach to them. We have already passed the point where individual decisions could turn around the course of the national economy. As a major investor Varma has been in a position to observe that little has been done over the past decade to renew corporate structures, especially in mid-sized companies. There is no quick fix to the impacts created by this neglected work. Besides, Finland desperately needs growing neighbouring markets and a growth-hungry Europe.

Varma is well-positioned to face economic challenges; our solvency capital and investment assets are at a record high. Our good position is based on the strong recovery of the investment markets, efficient Finnish regulation and the good work carried out at Varma. Our efficiency also improved significantly last year. Varma’s clients benefit from our strong solvency and high efficiency through increasing client bonuses. In fact, the client bonuses based on our performance in 2013 will reach a new record.

The economic challenges are reflected in Varma’s single largest client group, industry, as a loss of jobs and diminishing total payroll. As a result, the growth of Varma’s premium income slowed in 2013, and we have to prepare for the fact that this trend will continue. We intend to meet this challenge by maintaining Varma’s good financial performance. We will take care of our solvency, operate efficiently and attend to the healthy development of our clientele. We will not compete for customers in ways that jeopardise the above-mentioned targets.

Risto Murto

CEO (effective 1 January 2014)