Mandatum Life Group's profit for January-June 2011 totalled EUR 84 million (69) before taxes. Profit at fair value, which recognises changes in the market values of investment assets, was negative showing a loss of EUR 8 million (100) after taxes. The first half-year's results are burdened by EUR 21 million in write-offs of investment assets and the increases made to technical provisions in Q1. Return on investment assets on the basis of fair value was 1.3% (3.8).
Premiums written on Mandatum Life Group's own account decreased from those of one year ago to EUR 444 million (603). Part of the difference between the figures of this and last year is due to the transferred responsibilities for group pensions, which are included in last year's figures. However, the company has also seen a considerable decrease in unit-linked premiums written as compared to last year's record-breaking figures. Mandatum Life's overall market share in Finland decreased to 22.9% (26.0) in direct business and 24.5% (30.2) in unit-linked life insurance.
Mandatum Life's solvency ratio weakened slightly from the levels seen in late March, now totalling 23.2 per cent. The parent company's solvency margin is over 5 times the set minimum.
The expense result displayed positive growth, increasing to EUR 2.7 million (0.9) from the figures of the first 6 months of 2011.
Mandatum Life Group's unit-linked technical provisions remained at the levels seen in late March, totalling EUR 3,198 million (March 2011: 3,192). Technical provisions related to with-profit products continued to decline, totalling EUR 4,346 million (March 2011: 4,383). The technical provisions related to with-profit products include reserves for decreased discount rates and additional reserves for future bonuses to the total amount of EUR 162 million.
"All in all, the results of the first half-year can be considered positive. After last year's record-breaking levels, premiums written are somewhat behind target. Our view is, however, that the strategy of absolute return that we apply to our own investment portfolios will prove its advantages in the difficult investment markets of the upcoming autumn. This should, in turn, improve the figures for premiums written from those seen earlier in the year", CEO Petri Niemisvirta points out and adds, "In terms of profit, the unstable state of the economy poses a challenge. Our company's solvency is at an excellent level, and our balance is beyond strong thanks to our increased technical provisions. These improve our chances of continuing to report positive results in years to come."
Key figures Q2/2011
Total premiums written, on own account: EUR 444 million (603)
Profit before taxes: EUR 84 million (69)
Return on equity: -1,6 % (25,0)
Expense ratio: 115,8 % (119,8)
Solvency ratio: 23,2 % (25,8)
Return on investments: 1,3 % (3,8)
Average number of staff: 507 (463)
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