FINANCIAL STATEMENTS 213 27 February 214 1
ILMARINEN S KEY FIGURES FOR 213 Return on investments 9.8 per cent Value of investment assets: EUR 32.3 billion Solvency capital: EUR 7.1 billion Solvency ratio: 28. per cent Solvency position: 1.9 times the solvency limit Premiums written: EUR 4.1 billion Pension expenditure: EUR 4.1 billion Net sales of pension insurance: EUR 16 million Client bonuses: EUR 86 million 2
3 Sales performance
SUCCESS IN THE COMPETITION BETWEEN PENSION INSURANCE COMPANIES Net transfer result for the period 1 Jan 31 Dec 213 Number of policies Payroll 1, EUR TyEL 962 57,82 YEL 1,195 6,723 Total 2,157 63,85 4
NUMBER OF INSURANCE POLICIES RISING Number of insurance policies 7 7, 6 6, 5 5, 4 4, 3 3, 2 2, 1 1, 56,717 58,776 6,612 52,243 53,66 36,767 36,511 37,462 38,237 35,839 29 21 211 212 213 TyEL-vakuutukset policies YEL-vakuutukset YEL policies 5
6 We are responsible for the pension provision of over 9, people
NUMBER OF PEOPLE INSURED INCREASED SLIGHTLY Number of people insured 6 6, 5 5, 472, 51, 515, 529, 529, 4 4, 3 3, 2, 1, 52,243 53,66 56,717 58,776 6,612 29 21 211 212 213 Under TyEL TyEL-vakuutetut Under YEL YEL-vakuutetut 7
INCREASING NUMBER OF PENSIONERS Pensions paid on 31 Dec 213 35 35, 3 3, 25 25, 2 2, 15 15, 1 1, 55, Survivors' pension Unemployment pension Disability pension Part-time pension Early-aged pension Old-age pension 29 21 211 212 213 8
INCREASED NUMBER OF PENSION DECISIONS New pension decisions 213 212 Change, % Old-age pensions 1,88 9,415 7.1 Early old-age pensions 626 655-4.4 Part-time pensions 88 66 45.2 Disability pensions 6,333 6,52-2.9 Unemployment pensions 9 21 Survivors pensions 3,54 3,96-1.4 Right to rehabilitation 2,375 2,67 14.9 New pension decisions, total 23,365 22,38 4.4 Other pension decisions (incl. continued and amended decisions) 19,368 18,671 3.7 Pension decisions, total 42,733 41,51 4.1 9
Days SHORTER THAN AVERAGE PROCESSING TIMES Processing times of pension applications 213 8 7 6 5 4 3 2 1 7 62 58 57 44 4 31 32 3 13 disability pensions rehabilitation survivors' pensions part-time pensions old-age pensions Ilmarinen Other TyEL/YEL institutions Source: The Finnish Centre for Pensions 31 Dec 213 1
EUR billion PENSION CONTRIBUTIONS EUR 4.1 BILLION Premiums written 4, 4. 4.1 3, 3. 2, 2. 1, 1.,. 29 21 211 212 213 TyEL YEL 11
EUR billion PAID TO PENSIONERS EUR 4.1 BILLION Pensions paid 4, 4. 4.1 3, 3. 2, 2. 1, 1.,. 29 21 211 212 213 TyEL YEL 12
13 Investments and solvency
% NET INVESTMENT RETURN AT CURRENT VALUE 2 16 12 8 4 9. 8.1 13.8 9 6 16.1 1.5 4.5 2.8 1.8 2.4 8.7 7.7 7.9 7.8 12.1 11.1 8.5 8.8 5.7 5.2 15.8 12.9 1.8 1.6 8.6 7.5 9.8 5.9 4. -4-8 -1.2 -.5-4. -2 3-12 -16-2 -17.7-14. Ilmarinen Other companies on average Ilmarinen s annual average nominal return (17 years) Ilmarinen s annual average real return (17 yrs) 14 *213 returns of other companies estimated based on preliminary financial statement information
EUR mill. RETURN ON INVESTMENTS BACK TO LONG-TERM TREND Cumulative net return on investments 1997 31 Dec 213 22, 18 18, 16 16, 14 14, 12 12, 1 1, 8 8, 6 6, 4 4, 2 2, Cumulative return corresponds with an annual average return of 5.9% and an average real return of 4.% 15
5-YEAR REAL RETURN 5.8% % Ilmarinen Finnish equities and shares European equities and shares Euro government bonds Euro corporate bonds 12 / 213 9.8 31.6 2.8 2.2 2.2 212 7.5 15.5 18.2 11. 13.6 Average return over five years 7.8 16.4 14. 4.4 7.5 Average return over 1 years 5.2 1. 6.7 4.5 4.5 Average return since 1997 5.9 9.5 6.6 5.2 5.1 Real average return over five years 5.8 14.3 12. 2.5 5.6 Real average return over 1 years 3.2 7.9 4.7 2.6 2.5 Real average return since 1997 4. 7.5 4.7 3.3 3.2 16
RETURN ON INVESTMENTS 9.8% Market value EUR mill. Market value % Risk breakdown EUR mill. Risk breakdown % Fixed-income investments 14,313.9 44.4 13,398.6 41.5 4.5 Loan receivables Bonds Public corporation bonds Other bonds Other money market instruments and deposits (incl. investment receivables and payables) 1,789.1 11,836.7 4,444.2 7,392.4 688.1 5.5 36.7 13.8 22.9 2.1 1,789.1 6,575. 2,647.8 3,927.2 5,34.5 Equities and shares 12,843. 39.8 13,847.8 42.9 2.9 Listed equities and shares Private equity investments Unlisted equities and shares 1,323.3 1,458.3 1,61.4 32. 4.5 3.3 11,328.1 1,458.3 1,61.4 Real estate investments 3,644.1 11.3 3,644.1 11.3 4.8 Direct real estate investments Real estate funds and joint investments 3,11.3 542.8 9.6 1.7 3,11.3 542.8 Other 1,469.2 4.6 1,612.7 5. -5.8 Hedge fund investments Commodity investments Other investments 49.4 7.8 1,52. 1.3. 3.3 49.4-29.8 1,233.1 5.5 2.4 8.2 12.2 15.6 35.1 4.5 3.3 9.6 1.7 1.3 -.1 3.8 Return % Volatility 4. 5.3.5 8.9. 21.9 9.8 28.6 5. 3.2 5.6 - - 2.2 11.4 6.9 Investments total, % Effect of derivatives, % Investments total 32,27.2 1. 32,27.2 1.7 -.7 1. 9.8 3.6 The modified duration of bond investments is.2 years 17
EUR mill. MARKET VALUE ON INVESTMENTS GROWING STRONGLY Asset allocation according to risk 35, 3, 25, 25,179.8 28,121.7 27,484.9 29,52.4 32,227.2 2, 15, 1, 55, 31.12.29 31.12.21 31.12.211 31.12.212 31.12.213 Equities and shares Real estate Other Fixed income incl. effect of derivatives 18
SHARE OF EQUITIES AND SHARES IN PORTFOLIO STILL GROWING Asset allocation according to risk 1 1% % 9 9% % 8 8% % 7 7% % 6 6% % 5 5% % 4 4% % 3 3% % 2 2% % 1 1% % % % 31.12.29 31.12.21 31.12.211 31.12.212 31.12.213 Equities and shares Real estate Other Fixed income incl. effect of derivatives 19
% SHARE OF EUROPEAN EQUITIES AND SHARES INCREASED 5 45 4 35 3 25 2 15 1 5 Finland Europe USA Japan China Emerging markets exl. China 31.12.29 31.12.21 31.12.211 31.12.212 31.12.213 2
% % of of technical technical provisions provisions SOLVENCY STRENGTHENED 45 45 4 4 35 35 3 3 25 25 2 2 15 15 1 1 5 5 41.3 41.3 35.4 35.4 27.2 27.2 25.5 25.5 18.1 16.2 18.1 16.2 33.7 32 33.7 32 25.6 25.6 22.3 22.3 32.5 32.5 29.7 29.7.4,.4, 14, 14, On 31 December 213, the solvency ratio was 1.9 times the solvency limit (31 Dec. 212: 2.2). 28. 28. 23.9 23.9 21.1 21.1 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 Solvency capital Solvency capital Tasausvastuusta Provision for pooled toimintapääomaan claims treated rinnastettava equal to solvency osa capital Tasausvastuusta Provision toimintapääomaan for pooled claims rinnastettava treated equal osa Vakavaraisuusraja Solvency limit to solvency capital Vakavaraisuusraja Solvency limit 21
22 Cost efficiency and client bonuses
EUR mill. OPERATIONAL EFFICIENCY Loading profit and operational efficiency 16 14 12 1 8 6 4 2 Operating expenses as a percentage of loading profit = Operational efficiency 29 21 211 212 213 Activity-based operating expenses Loading profit 76% 74% 74% 8% 75% 23
PRODUCTIVITY OF ILMARINEN S PERSONNEL INCREASING Person years/1, insured,8.8,7.7,6.6,5.5,4.4 htv total yht py htv-hk py covered by expence loading component,3.3 28 29 21 211 212 213 24
CLIENT BONUSES EUR 86 MILLION 213 212 211 21 29 Solvency capital, EUR mill. 7,123 5,752 4,89 6,578 4,877 Loading profit, EUR mill. 35 27 34 32 28 Transfer to client bonuses, EUR mill. 86 62 55 71 52 Transfer to client bonuses of TyEL payroll, %.5.4.3.5.4 Transfer to client bonuses per continuous TyEL employment contract, EUR 163 117 17 142 11 25
CLIENT BONUSES EUR 62 MILLION FOR A BETTER 212 211 21 29 28 LIFE Solvency capital, EUR mill. 5,752 4,89 6,578 4,877 2,673 Loading profit, EUR mill. 27 34 32 28 35 Transfer to client bonuses, EUR mill. 62 55 71 52 31 Transfer to client bonuses of TyEL payroll, %.4.3.5.4.2 Transfer to client bonuses per continuous TyEL employment contract, EUR 117 17 142 11 65 26