PRESS RELEASE
For release on 23 March 2010
Tapiola General
The overall result of the Tapiola General Mutual Insurance Company (Tapiola General) grew to EUR 149.1 million (EUR -195.2 million). Operating profit grew by EUR 135.8 million compared to the previous year, rising to EUR 83.0 million (EUR -52.8 million), and the change in the difference between current and book values increased the overall result by EUR 66.1 million. The result was significantly better than anticipated.
The return on capital employed at current value achieved by Tapiola General was 7.2 per cent (‑4.6%).
Tapiola General’s solvency capital was EUR 1,317.0 million (EUR 1,174.5 million), and its solvency ratio (solvency capital in relation to premiums earned) was 203.6 per cent (189.2%). Tapiola’s solvency level is excellent.
Tapiola General’s growth in premium income from non-life insurance outperformed the industry average. It grew by 4.0 per cent to EUR 675.2 million (EUR 648.9 million), while the Federation of Finnish Financial Services estimated the industry’s growth to reach 2 per cent. The company’s direct business premium income increased by 3.9 per cent to EUR 629.5 million (EUR 606.1 million).
The combined ratio before the unwinding of discount, a key measure of profitability, was 102.7 per cent (109.5%). The combined ratio is affected by benefits given to owner-customers. Without the effect of customer bonuses, the combined ratio before the unwinding of discount would have been 94.7 per cent (101.0%).
The overall value of the benefits given to Tapiola General’s owner-customers amounted to EUR 72.5 million (EUR 71.3 million), including customer bonuses, loyalty discounts, service benefits and discounts based on cooperation agreements.
Tapiola Life
The overall group result of the Tapiola Mutual Life Assurance Company increased to EUR 121.6 million (-92.8 million). The Group's operating profit increased by EUR 49.7 million to EUR 66.6 million (EUR 16.9 million).
The Group's technical provisions amounted to EUR 2.7 billion (EUR 2.6 billion).
The return on capital employed at current value achieved by the parent company Tapiola Life in its investment operations was 7.0 per cent (-1.1%). The corresponding return achieved by the subsidiary Tapiola Corporate Life Insurance, which merged into the parent company at the start of the year, amounted to 6.8 per cent (-1.2%).
Tapiola Life Group’s direct business (underwritten) premium income was EUR 233.1 million (EUR 205.0 million), an increase of 13.7 per cent on the previous year.
According to statistics published by the Federation of Finnish Financial Services, the sector’s overall premium income increased by 17.2 per cent. The growth in the industry can be explained particularly by the unit-linked capital redemption market volume of EUR 626 million, which has almost quadrupled from the previous year. Tapiola Life did not grant any unit-linked capital redemption contracts in 2009. The industry’s overall premium income without unit-linked capital redemption contracts fell by 0.1 per cent.
The Group’s solvency ratio, or solvency capital in relation to technical provisions, was 17.3 per cent (14.8%).
The Group’s expense ratio in proportion to total expense loadings was 127.2 per cent (120.6%).
Tapiola Pension
The overall result of the Tapiola Mutual Pension Insurance Company (Tapiola Pension), comprising the result of the insurance business, net return on investment and loading profit, totalled EUR 583.1 million for 2009 (EUR -612.2 million).
In 2009, Tapiola Pension’s net investment income at current value totalled EUR 1,013.0 million (EUR -667.1 million), exceeding one billion euro for the first time.
Net return on investment at current value was 13.5% (-8.3%). The result was Tapiola Pension’s best ever. During the past ten years, the annual return on investment activities has averaged 5.3 per cent. Direct equity investments yielded 53 per cent in 2009 (-41.7%) and fixed-income investments 8.1 per cent (4.7%). At the end of 2009, investments in companies (equities and bonds) accounted for nearly 50 per cent of all investments.
Tapiola Pension’s solvency ratio was 23.7 per cent (16.2%), and the solvency margin was 3.0 times the solvency limit (2.9 times). Without the temporary changes in legislation, the corresponding figures would have been 18.8 per cent (11.5%) and 2.4 (2.0).
Premium income decreased to EUR 1,388.0 million (EUR 1,403.0 million). Pensions paid to pensioners amounted to EUR 1,111.1 million (EUR 988.3 million).
The insurance business showed a loss of EUR 17.9 million (EUR +8.3 million), which was mainly due to the temporary discount granted for the contribution share of disability pensions.
Tapiola Pension’s loading profit was EUR 9.7 million (EUR 10.9 million). The operating expenses were 84.2 per cent (81.8%) of the insurance premium loading profit.
Customer bonuses totalled EUR 18.6 million (EUR 12.7 million).
Tapiola Bank Ltd
Customer funds managed by the Tapiola Bank Group totalled EUR 6,835.5 million (EUR 6,069.0 million) at the end of the financial year.
The Bank Group’s profit for the financial year was EUR 0.1 million (EUR -1.4 million). At the end of the financial year, the Bank Group’s solvency ratio in accordance with the Act on Credit Institutions was 14.9 per cent (16.8%).
Tapiola Bank Ltd’s profit totalled EUR 1.7 million (EUR 1.6 million). The credit portfolio grew by EUR 183.1 million to EUR 1,156.1 million (EUR 973.0 million) and the bank’s fund-raising from customers by EUR 82.0 million to EUR 1,271.5 million (EUR 1,190.0 million). The bank’s interest margin was EUR 13.0 million (EUR 12.0 million). Solvency ratio remained strong and at the end of the financial year it was 16.3 per cent (18.7 per cent).
Tapiola Bank Ltd’s total number of customers increased by 25,000 to 184,000 customers (159,400) during the financial year. The number of account customers grew by 18,000 to 152,000 customers (134,000).
Tapiola Bank’s customer bonuses amounted to EUR 10.0 million (EUR 9.6 million) during the financial year. The bonuses were distributed as loyalty benefits and as better interest rates than those available elsewhere on the market.
Tapiola Asset Management Ltd
The fund capital in the mutual funds managed by Tapiola Asset Management Company increased to EUR 1,594.2 million (EUR 1,026.0 million) in 2009. The company’s market share of funds was 2.9% (2.5%) at the end of the year.
Tapiola Asset Management's operating profit increased to EUR 0.5 million (EUR -0.2 million). Total assets managed by the company were EUR 5,564.0 million (EUR 4,879.5 million).
Tapiola’s funds gained nearly 11,000 new unit holders during the year, which increased the number of unit holders to nearly 45,000. Tapiola Asset Management’s number of customers grew by over 5,000 to more than 24,000 customers at the end of the year.
Tapiola Real Estate Ltd
The turnover of Tapiola Real Estate Ltd increased to EUR 7.5 million (EUR 6.7 million) and operating profit to EUR 0.7 million (EUR 0.5 million). Return on equity was 61.4 per cent (82.3%). The company’s equity ratio at the end of the review period was 42.5 per cent (27.8%) and liquidity was at a good level.
Although the real estate investment market was very quiet, the company carried out real estate investments during the financial year totalling EUR 268.0 million (EUR 360.2 million) and real estate sales totalling EUR 42.7 million (EUR 266.0 million) for its customers.
The market value of the real estate property managed by the company increased to EUR 2,309.1 million (EUR 2,169.5 million). The leasable surface area was approximately 1.1 million square metres (1.0 million m2), and consisted of office, commercial, logistics, hotel and residential facilities.
Further Information
Finance Director
Markku Paakkanen
Tel. +358 9 453 2500
Information
Advance information on the Financial Statements has been published in press releases in January-February.
Advance Information on Tapiola Group's Financial Statements (16 February 2010)
Advance Information on Tapiola Bank's and Asset Management Company’s Financial Statements (27 January 2010)
Advance information on Tapiola Pension’s result (26 January 2010)
Annual Report
On an annual basis, Tapiola publishes the Annual Report which includes, for example, information on the result and financial position of the Tapiola Group companies.
The Annual Report of Tapiola Group for 2009 will be published in English by the end of May 2010. The Annual Report and Financial Statements of the companies (Tapiola General, Tapiola Life, Tapiola Pension, Tapiola Bank) will be published in English by the middle of May 2010.
You will find the Annual Report and Financial Statements from our web pages.