Finnish earnings-related pension provider Ilmarinen made an investment return of 7.4 per cent for the period from January to September 2024, equal to €4.4bn, its interim results reveal.

The market value of Ilmarinen’s investments grew to €62.9bn over the period. The provider’s solvency capital increased to €14bn, while its solvency “strengthened” over the period, rising to 128.1 per cent, up from 125.4 per cent.

In addition to this, the provider’s return on equity investments was 11.9 per cent, and on fixed-income investments 4.6 per cent.

Its long-term average return on investments was 5.8 per cent since 1997, corresponding to an annual real return of 3.9 per cent.

Commenting on the market activity, Ilmarinen chief investment officer, Mikko Mursula, said: “The main driver of Ilmarinen's positive return on investment was the listed stock market. Investments in US equities performed particularly well.

“The fall in interest rates that started towards the end of the summer improved the return on the fixed income portfolio in the third quarter.”

The provider said that employment in Finland has “weakened” since last summer, with the number of employees in the companies belonging to Ilmarinen’s business cycle index falling by -2.8 per cent year-on-year during January–September. In September, the decline was -3.4 per cent. 

Ilmarinen CEO and president, Jouko Pölönen, said: “Employment declined in all industries we track in the index, and there is no sign of turn for the better yet. The biggest declines were in labour hire services, construction, and accommodation and food services.”

The premiums written rose by 2 per cent to €5,299m, which Ilmarinen said the growth was due to the increase in customers’ payroll. Pensions paid by Ilmarinen rose by 7 per cent to €5,776m and were paid to 454,000 pensioners.

Figures also showed that cost efficiency improved further as from January to September the operating expenses decreased by 3 per cent to €69m, 0.32 per cent of the payroll.

Meanwhile, net customer acquisition was €150m and rolling customer retention for the previous 12 months was 96.5 per cent.

“The investment environment has been favourable with inflation slowing and central banks lowering their key interest rates,” Pölönen added.

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