Varma

Pension cover

The number of pensioners and the euro amount of pensions paid is constantly rising at Varma. Our task is to pay pensions correctly and on time to an increasing number of pensioners. 

For our customers, applying for pension is a major decision and one that has an impact on their future, which is why we keep close track of our decisions to ensure that they are accurate and that our service is smooth.

In 2015 we improved the pension application handling process. As a result, we processed old-age pension applications at the end of the year much faster than on average in the sector: in December the average processing time for an old-age pension application was 38 days, in contrast to the sector average of 44 days. Around 5% of pension decisions were issued on the same day as the application was received for processing.

In 2015, we took a new handling system for pension applications fully into use, enabling even smoother services for our private customers.

Number of pensioners increasing 

In 2015 Varma paid EUR 5.2 billion in pensions to 337,100 recipients. The number of pensioners has been rising for years due to the change in Finland’s age structure and longer life expectancy.

Pension decisions

A total of 23,100 new pension decisions were made in 2015, which is some 10% more than in the previous year. The increase is attributed mainly to the rise in old-age pension decisions.

The number of rehabilitation applications grew around 9% from the previous year. Positive rehabilitation decisions increased 41% compared to 2014, and the total number of rehabilitation decisions rose 34% over the previous year.

These increases are due to a legislative change that took effect at the start of 2015 allowing us to make a decision concerning entitlement to rehabilitation in connection with the processing of a disability pension application, even if the customer has not applied for rehabilitation. In 2015, we made some 700 such preliminary rehabilitation decisions, and according to a sample survey, around 25% of them led to rehabilitation. Since 2010, the number of new disability pension applications is down 22%.

Those insured by Varma retire on average at the age of 63.6.

Varma prepares for pension reform

We are preparing for the 2017 pension reform together with our customers. Preparing for the reform is one of our key tasks.

Pension reform in brief

The age limit for old-age pension will gradually rise

Our client companies received information on the pension reform at our ‘Varmasti 2015’ events around the country. Approximately 1,100 client company representatives participated in the events.

Progress of the pension reform

Use of online services on the rise 

Varma’s private customers are active users of our online services. The most active user group is those aged between 60 and 64. Those aged 60 and over account for 32% of all users of Varma’s eServices.

Applying for a pension through our website has also steadily become more popular: 46% of all old-age pension applications were submitted electronically in 2015. Late in the year we introduced an online chat service, where our pension experts assist customers in real-time in filling out their pension application. The service was used in November and December by nearly 200 customers. In total, 74% of all private customer contacts took place online in 2015.

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The year in brief

In 2015, Varma’s return on investments stood at 4.2 per cent. The value of investments increased to EUR 41.3 billion. Premiums written increased clearly, and operating expense efficiency also showed positive development. Solvency capital was strong at EUR 10.0 billion.

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President & CEO review

2015 was a good year for Varma, and we succeeded well according to all key indicators: we maintained our strong solvency position, our premium income increased, we processed pension applications faster than before and our operational efficiency is at a competitive level.

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Lower earnings-related pension contributions for customers

Varma is a solvent company. That means the best client bonuses in the sector and lower pension contributions for our customers. Our modern digital services provide our customers with a comprehensive set of tools that enable them to take care of their pension matters easily.

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Varma for entrepreneurs

Varma is a solvent company and thus a safe choice. Varma’s extensive services, provided through various channels, make attending to insurance matters easy.

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Pension cover

The number of pensioners and the euro amount of pensions paid is constantly rising at Varma. Our task is to pay pensions correctly and on time to an increasing number of pensioners.

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Workability and good working life

Workability management promotes companies’ competitiveness and productivity and the societal goal of longer careers. Our workability services improve employee well-being and working life at our client companies.

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Varma’s targets and strategy

Varma's core task is to secure pensions. Our main goals of strong solvency, good development in premiums written, high quality pension services and efficient operations, also stem from this.

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Operating environment

The economic year 2015 ended in a climate of turbulence. Uncertainty in the global economy is again on the rise.

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Solvency

Varma’s strong solvency secures pensions. Thanks to its high solvency, Varma has been paying very competitive client bonuses for several years now.

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Fixed income investments

The return on fixed-income investments remained slightly negative, at -0.4 per cent. They accounted for 30 (32) per cent of investments and had a market value of EUR 12.3 (12.8) billion.

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Equity investments

Equity investments performed the best of all asset classes. They accounted for 45 (41) per cent of Varma’s investments and yielded a return of 8.8 (9.1) per cent.

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Real estate investments

Varma’s real estate investment portfolio amounted to EUR 3.9 (3.8) billion at the end of 2015, and the total return stood at 3.3 (3.8) per cent.

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Other investments

Other investments accounted for 17 (20) per cent of Varma’s portfolio.

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Varma’s investment principles

With EUR 41.3 billion in investment assets, Varma is Finland’s largest private investor. We invest the assets to secure present and future pensions.

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Targets and measures

On the basis of the materiality assessment, we defined Varma’s CSR targets, indicators and measures.

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Personnel

Varma’s success is based on competent personnel efficiently handling our customers’ pension cover. Customer focus is at the core of Varma’s expert work and operational development. Service that is appreciated by our customers is the result of broad competence and co-operation.

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Responsible investment

Responsibility is an integral part of our investment operations and ownership practices. In 2015, we looked into the responsibility of our hedge funds and decided to determine the carbon footprint of our investments.