Finnish earnings-related pension provider Ilmarinen achieved a 2.1 per cent return on its investments in the first half of 2025, as strong fixed income and equity markets lifted assets to a record €64bn and maintained solid solvency.

The return, equivalent to €1.3bn, compares to 4.9 per cent in the same period last year. Solvency capital stood at €14bn, with a solvency ratio of 127.3 per cent.

Commenting on the results, Ilmarinen president and CEO, Jouko Pölönen, said: “Our investment assets reached a record level of €64bn and our solvency is strong. We have been improving our efficiency over the long term, and our cost efficiency is reflected in lower premiums for our customers.”

Fixed income investments returned 2.9 per cent, compared to 1.4 per cent a year earlier, while equities delivered a 1.5 per cent return, down from 9.3 per cent in H1 2024. Real estate investments returned 0.4 per cent and other investments delivered 4.4 per cent.

Ilmarinen executive vice president for investments, Mikko Mursula, said geopolitical and trade tensions shaped markets during the period.

“Interest rates and equity markets performed broadly well in the first half of the year and stock markets quickly recovered from the fall in early April,” he said.

“Uncertainties related to US fiscal and trade policies were strongly reflected in currency markets, weakening the US dollar and thus the return on dollar-denominated investments.”

Ilmarinen’s long-term average nominal return since 1997 stands at 5.8 per cent, equivalent to a real return of 3.9 per cent.

Premiums written increased by 3 per cent to €3.67bn, supported by a similar rise in customers’ wages and salaries.

However, the Finnish employment market remained weak, with Ilmarinen’s business cycle index showing a 1.9 per cent fall in employee numbers in the first half of the year compared to the previous year.

“Only economic growth can reverse the deterioration in employment,” Pölönen said. “Growth comes from work, investment and productivity, and it is important for businesses and society to improve productivity to ensure competitiveness.”

Ilmarinen’s cost efficiency continued to improve, with medical expenses unchanged at €47m, representing 0.32 per cent of insured payroll and earned income, down from 0.33 per cent a year earlier.

Pensions paid out in the first half of the year increased by 5 per cent to €4.02bn. The company made 23,367 new pension decisions, 19 per cent more than in H1 2024, with decisions on old-age pensions doubling year-on-year. On average, retirement pension decisions took three days to process.

Pölönen will step down as CEO at the end of August to join eQ Plc.

“It has been a privilege to lead Ilmarinen for the past seven years… investment assets have reached record levels, and our premium income has increased by 36 per cent while insurance management costs have decreased by the same amount,” he said.

Mursula will take over as CEO from 1 September. Looking ahead, the provider expects premium income to continue to grow in line with the rising wage bill.

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