Press release 11 October 2016

Situation of Finnish life and non-life insurance sectors as at 30 June 2016: Life and non-life insurance sectors display good Solvency II capital levels

​The solvency of the Finnish life and non-life insurance sectors is at a good level. The solvency ratio of the life insurance sector was 173 % and that of the non-life insurance sector 220 %. A company’s solvency ratio must be above 100 %, but in practice a company’s assessment of overall solvency needs requires setting the company’s target limit above 100% if different scenario and sensitivity analyses so indicate. Life insurance companies held 94 % of their own funds in the form of highest-quality capital, and non-life insurance companies 98 %.

The sectors’ solvency ratios are not comparable with the previous year’s figures, as the calculation method has changed towards a more market-consistent and risk-based approach.

‘Changes taking place and the interest rate level prevailing in the investment markets are of great significance for companies´ solvency,’ says Marja Nykänen, Deputy Director General.

The impact of lower interest rates on investment returns has been positive. The return on investment for the first part of the year was 2-3%, mainly on account of good returns on fixed-income investments. The reinvestment risk, however, continues to be on the increase.

Subdued economic growth and the protracted period of low interest rates are eroding life insurance companies’ premium income; growth in premium income for the non-life insurance sector would also appear to have come to a halt. By contrast, the combined ratio for non-life insurance was exceptionally good.

Supervision of employee pension insurance companies based on a long-term perspective

Supervision of employee pension insurance companies and public access to documents have been at the centre of public debate.

Employee pension insurance companies manage highly significant portfolios of assets, and are therefore subject to extensive supervision. ‘The supervision is based on a long-term perspective and focused on supervisory findings, in addition to regular measures,’ notes Anneli Tuominen, Director General.

The Financial Supervisory Authority (FIN-FSA), in its capacity as an authority, is responsible for providing information on documents that are in the public domain. If there is ambiguity regarding interpretation of legislation, the FIN-FSA must obtain a court opinion on the matter.

Articles (in Finnish)

Further information

  • Anneli Tuominen, Director General
  • Marja Nykänen, Deputy Director General (life and non-life insurance companies, employee pension insurance companies)
  • Sonja Lohse, Chief Advisor (Act on the Openness of Government Activities)

Requests for interviews

The Communications Unit is available for media queries: tel. +358 50 385 5154

The figures for the banking and employee pension insurance sectors were already reported on 9 September 2016: Financial position and risks of supervised entities 2/2016: Finnish banking sector's profitability weaker, solvency ratio of employee pension sector remained solid – challenges remain