Mandatum Life’s result for 2017 grew, but premiums written fell short of the previous year’s level.
Mandatum Life Group’s result before taxes for 2017 was EUR 236 million (210). Comprehensive income after taxes, taking into account changes in market values, amounted to EUR 188 million (232). The good result can be mainly attributed to the very favourable investment returns. The return on investments, not including the segregated insurance portfolio, was 6.5 per cent (7.2). The return on investments for the segregated insurance portfolio was 1.8 per cent (4.7). The risk result was EUR 35 million (31) and the expense result was EUR 33 million (26).
Premiums written on Mandatum Life Group’s own account amounted to EUR 960 million (1,116). Unit-linked premiums written totalled EUR 850 million (973).
Mandatum Life Group’s total technical provisions increased to EUR 11.6 billion (11.3). Unit-linked technical provisions grew to an all-time record high of EUR 7.1 billion (6.4) at the end of 2017. The with-profit portfolio decreased as planned and stood at EUR 4.6 billion (4.8) at year-end. The with-profit portfolio includes increases in the reserve for decreased discount rates of EUR 325 million (273) for the original portfolio, and EUR 261 million (275) for the segregated portfolio.
The valuation of the insurance portfolio sold to Danske Bank was completed in June 2017. The portfolio transfer is expected to take place by the end of 2018. Mandatum Life and Danske Bank have agreed on a transitional period during which fund management co-operation will be continued to ensure that the services offered to existing customers remain unchanged until the portfolio transfer. From customers’ perspective, the services will remain unchanged during the transitional period.
In 2017, Mandatum Life paid out a total of EUR 402 million in pensions to 66,000 pensioners. A total of approximately 50,000 other claims were also paid out.
Statement by CEO Petri Niemisvirta:
“Last year was a successful one for Mandatum Life. For the sixth consecutive year, the investment result was excellent. The exceptionally strong return on equities played a big part in that. Both the expense and risk result reached their highest levels in the company’s history. Thanks to the strong result, our solvency position has also strengthened further.
We had strong sales overall during the year, even though our premiums written fell short of the previous year’s level. A significant share of our sales channels’ resources was employed for implementing several regulatory changes.
In terms of wealth management, the co-investment approach was expanded to cover an even broader customer base and group of investment instruments. The co-investing strategy means that we invest in objects that are part of Mandatum Life’s and our partners’ successful investment activities through their own balance sheet. In September 2017, we announced a business transaction involving Mandatum Life’s acquisition of Fourton’s funds that invest in Central European companies. The transaction allows us to combine two internationally successful teams into a hub of excellence.
In 2017, 94 per cent of our personnel considered Mandatum Life as an excellent place to work. We believe that a positive employee experience leads to a good customer experience. At Mandatum Life, determined efforts are made to enhance the customer experience, and during the year, we succeeded in improving customer satisfaction across the board. We also continued to invest in digital services, and we introduced the ML Money mobile service to both Personnel Fund members and supplementary pension recipients. These starting points put us in a good position to tackle 2018.”
Key figures 2017 Premiums written, own account: €960 million (1,116)
Profit before taxes: €236 million (210)
RoE: 13.3% (15.9)
Solvency ratio: 182% (160)
Return on investments: 6.5% (7.2) and on the segregated portfolio 1.8% (4.7)
Average number of staff: 525 (543)
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