The year in brief
Equities drove the total return on Varma’s investments to 9 per cent in 2013. Thanks to the good investment result, Varma’s solvency was at a record-high level at the end of the year.
Share prices increased strongly during 2013, and interest rates remained at a low level owing to the Eu-ropean and U.S. central banks’ monetary policies with their strong focus on stimulus. Long-term interest rates increased but remain at a very low level.
Solvency at an all-time high
The return on Varma’s investments was very good. The value of investments stood at EUR 37.7 (34.4) billion at the end of the financial year, and their return was 9.0 (7.7) per cent. As a result of the good re-turn development, Varma’s solvency capital strengthened to EUR 9.1 billion, i.e. to 31.6 (28.0) per cent of the technical provisions.
Equities generated the strongest return of all asset classes. During the year, Varma increased the share of equities and reduced the share of fixed-income investments in its portfolio.
Varma is a major investor in Finland: 36.4 per cent, or EUR 13.7 billion, of our total investments has been invested in different ways in Finnish society.
Read more about Varma’s investment activities in Investment year 2013.
Operating expense efficiency raised client bonuses
Varma improved its operating expense efficiency and used 76 (84) per cent of the expense loading component included in insurance contributions for operating expenses. That efficiency benefits customers: EUR 105 (78) million was set aside for client bonuses.
Premium income stood at EUR 4.3 (4.2) billion.
At the end of the year, 531,200 (539,700) people were insured by Varma, and the company had 333,700 pension recipients. EUR 4.8 (4.5) billion in pensions were paid out, i.e. 6 per cent more than in the previous year.
Varma’s rehabilitation services consistently produce good results; 72 per cent of those who received our rehabilitation continued in working life following their rehabilitation.