Mandatum Life increases premium income and gains market share
Mandatum Life Group's profit before taxes for January-June 2012 decreased to EUR 65 million (84). The profit is burdened by the decreased discount rates used for technical provisions. Comprehensive profit after tax, which includes the changes in the market value of investments, increased to EUR 105 million (-8). Return on investments at fair value was 3.9 per cent (1.3).
Premium income on Mandatum Life's own account grew 11 per cent, totalling EUR 493 million (444). The parent company's premium income from unit-linked investments grew EUR 57 million. However, premium income in the Baltic countries, consisting primarily of unit-linked investments, decreased to EUR 13 million (28). In Finland, Mandatum Life's overall market share in direct business rose to 26.9 per cent (22.9) and to 28.8 per cent (24.5) in unit-linked life insurance.
Mandatum Life Group's solvency ratio, according to Solvency I regulations, continued to improve as a result of the good fair value return. At the end of the quarter, the company's solvency ratio was 23.5% (20.9), with the parent company's solvency margin still over 5 times the set minimum.
Mandatum Life Group's expense result decreased to EUR 1.5 million (3.4) from the figures of the first 6 months of 2012. The expense result of the remaining part of the year is expected to meet at least last year's figures. This fiscal period's expense result is burdened by sales commissions, paid mostly in advance, which are a result of the large increase in sales. The company does not distribute the costs of these advance payments over several fiscal periods.
The company's unit-linked technical provisions continued to increase to EUR 3,382 million (3,054). Technical provisions related to with-profit products have dropped from the start of the year by almost 60 million, now totalling EUR 4,191 million. The decrease is due to the fact that an increasingly large portion of the insured has reached retirement age. The company has paid over EUR 160 million in pensions thus far this year. Technical provisions related to with-profit products include reserves for decreased discount rates totalling EUR 117 million.
"We have many reasons to be pleased with the first part of the year, such as our good result, our increase in premium income and our improved market share. We also believe that this period's expense result is merely a minor glitch and that the result will rise to meet last year's figures, at the very least. Our strong solvency ratio provides us with a good foundation for business, even in unstable market situations," says CEO Petri Niemisvirta.
Key figures H1/2012:
Total premiums written, on own account: EUR 493 million (444)
Profit before taxes: EUR 65 million (84)
Return on equity: 23.0% (-1.6)
Expense ratio: 117.5% (115.8)
Solvency ratio: 23.5% (20.9)
Return on investments: 3.9% (1.3)
Average number of staff: 536 (507)
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