Decent start to the year despite challenging market situation
Mandatum Life’s January–March result before taxes grew to EUR 53 million (39). Due to the difficult conditions in the investment market, the total comprehensive income for the period, taking into account changes in the market value of assets, fell to EUR -14 million (171) after taxes. The return on equity (RoE) was -4.4 per cent (50.3). The solvency ratio under the new Solvency II regulations, taking into account the transitional measures, remained strong, at 152% (158).
The expense result declined to EUR 3 million (5), and the risk result was EUR 5 million (7).
Mandatum Life Group’s premium income on its own account fell to EUR 244 million (377) in the first quarter of 2016. Mandatum Life’s market share grew and in Finland was 20.2 per cent (18.4).
The net return on investment assets, excluding the return related to unit-linked insurance, amounted to EUR 78 million (68). Income from unit-linked insurance amounted to EUR -143 million (466). The fair value reserve declined to EUR 475 million (532) in the first quarter. The return on investments at fair values in January–March was -0.1 per cent (4.2).
The investment assets covering Mandatum Life’s original with-profit liabilities on 31 March 2016 amounted to EUR 5.2 billion (5.5) at market values. The value of investments covering the segregated portfolio was EUR 1.2 billion (1.2). The return on investments at fair values in the segregated portfolio was 0.7 per cent (3.2) in January–March 2016.
Mandatum Life Group’s total technical provisions decreased to EUR 10.7 billion (10.9), and the with-profit technical provisions fell to EUR 4.9 billion (5.0) in the first quarter. The insurance portfolios with a high technical rate of interest (4.5 and 3.5 per cent) dwindled by EUR 54 million to EUR 3.0 billion during the period. The unit-linked technical provisions decreased to EUR 5.7 billion (5.9) towards the end of the first quarter and accounted for 54 per cent (54) of the total technical provisions.
Overall, Mandatum Life has strengthened its technical reserves by EUR 232 million (244) in response to the low interest rate level. The figures do not include items related to the segregated group pension insurance portfolio. The discount rate for 2016 has been lowered to 1.0 per cent and raised to 1.25 per cent and 2.00 per cent for 2017 and 2018 respectively. The technical rate of interest on the segregated group pension insurance portfolio is 0.75%.
Key figures Q1/2016
Premiums written, own account: €244 million (377)
Profit before taxes: €53 million (39)
RoE: -4.4% (50.3)
Solvency ratio: 152% (12/2015: 158%)
Return on investments: -0.1% (4.2) and on the segregated portfolio 0.7% (3.2)
Average number of staff: 539 (518)
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