Finnish earnings-related pension provider Elo has said that its economic expectations for the rest of 2025 are "cautiously positive", despite its total surplus falling to €162m in the first half of 2025.

The group's interim report emphasised that whilst its solvency ratio had weakened during H1, falling from 123 per cent at the end of 2024 to 122.1 per cent at the halfway point for 2025, the overall solvency position remained "stable" at 1.4.

And despite a negative investment return in the first quarter of 2025 of -0.4 per cent, the stock market's recovery increased the return on investment for the second quarter to 1.9 per cent.

Whilst the net return on investment was sigicantly down from the same period in 2024, falling from 5.2 per cent in H1 2024 to 1.4 per cent in 2025 (€492m), Elo CEO, Carl Pettersson, said that this was a "good" return given the turbulent market.

"Exchange rate fluctuations in the stock market were high due to US trade tariffs, and we made preparations to protect our solvency if the situation continues," he stated.
 
"In addition, the weakening dollar has reduced investment returns for euro-based investors."

The report showed that the ten-year average return on investment was 5.3 per cent, which equates to a real return of 3.2 per cent.

The group confirmed that operating expenses covered by the expense loading component also fell by 3.4 per cent during H1.

"Due to the cost savings achieved, our customers' monthly expense loading fees decreased by an average of 15 per cent from the previous year to 2025, and again by the same 15 per cent from 2025 to 2026," Pettersson noted.

In addition to this, the sale of new policies has hit a record high, as at the end of June, Elo managed 45,000 Finnish earnings-related Employees Pensions Act (TyEL) policies and 83,700 Self-Employed Persons’ Pensions Act (YEL) policies.

The total number of insured employees and self-employed persons was 480,100. This equated to a market share of new TyEL policies of 41.8 per cent, while the market share for new YEL policies was 38.5 per cent.

In addition to this, as at the end of June, Elo had 254,000 pension recipients, up from 253,900 at the end of 2024.

Pension payments in the first half of the year totalled €2,334m, up from €2,261m in the same period of 2024.

"Our strong work in the sales of new pension insurance policies has continued throughout 2025. Our continuous service development is driven by customer needs," Pettersson said.

And despite the issues seen in H1, the group has a "cautiously positive" economic outlook for the rest of 2025.

However, it clarified that these growth expectations are dependent on US customs policy, suggesting that any growth will need to be supported by an easing of monetary policy, slower inflation, and the strengthening of consumers' purchasing power.

 

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