Insurance sector solvency 31 March 2014: Generally strong solvency in the Finnish insurance sector
According to first quarter data published today by the Financial Supervisory Authority (FIN-FSA), the solvency of employee pension and non-life insurance sectors is strong and the solvency of the life insurance sector is good. Investment allocation remained virtually unchanged in all the insurance sectors.
Employee pension insurance sector situation virtually unchanged
Solvency improved slightly for nearly all the employee pension institutions: at the end of March, the solvency ratio averaged at 29.1% (31 December 2013: 28.4%). The risk-based solvency position also strengthened, to 2.2 (2.1). The rise in the average risk level of investment portfolios came to a halt. The return on investment was on average 1.6% (31 March 2013: 2.6%).
Life insurance sector solvency margin expanded
The higher solvency margin boosted the sector's average solvency ratio relative to the situation at the end of 2013. The solvency margin was 5.5 times (31 December 2013: 5.2 times) the statutory minimum. The risk-based solvency position remained at the year-end level, at 3.7. Investment allocation remained more or less unchanged. The return on investment averaged 1.9% (31 March 2013: 1.7%).
Non-life insurance sector profitability improved, key indicators virtually unchanged
Non-life insurance companies’ risk-based solvency position was 2.4 (31 December 2013: 2.3). The solvency margin rose slightly and was 4.2 times the statutory minimum. As a result of favourable claims developments, profitability improved significantly compared to the year-earlier period. Investment allocation remained unchanged. Return on investment was 1.1% (31 March 2013: 1.8%)
Due to significant changes in reporting requirements, capital adequacy reporting for January–March (exceptionally) does not include the banking sector. The next release of banking sector capital adequacy data will be in September–October, based on end-June data.
In this report, the employee pension insurance sector includes private sector employee pension institutions (employee pension insurance companies, pension funds). The figures do not include, for example, Keva (former Local Government Pensions Institution) and the State Pension Fund (VER).
For further information, please contact
- Marja Nykänen, Deputy Director General, tel. +358 10 831 5247
- Insurance sector solvency, 31 March 2014 (in Finnish, pdf)