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Financial statement presentation
In 2021, Veritas achieved a remarkable investment return of 12.6%, greatly improving its solvency ratio to 131.9% and expanding its customer base to 78,000 insured individuals. The financial performance was bolstered by successful equity investments yielding 25.2% returns, alongside record payouts of over EUR 600 million in pensions. Overall, the company's strong financial health and customer growth are highlighted by an increase in premiums written and a stable solvency position.
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Financial statement presentation
- 1. Financial statement presentation 2021 17February 2022
- 2. The year inbrief • Veritas succeeded in attaining excellent investment returns in 2021. The return from investments during the year amounted to 12.6 per cent, i.e., close to EUR 0.5 billion. • Veritas’ solvency position remained solid and was further improved owing to the good investment performance. • Veritas gained a record-breaking number of new customers and increased its customer retention. • At the close of the year, a total of 78 000 people were insured by Veritas. Veritas was paid out pensions to nearly 38 000 recipients. 4.4bn Value of investments 1.8 Solvency position 131.9% Solvency ratio 12.6% Investment return
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- 4. Highest investment returnfor Veritas in the 21st century 11.3 % 7.4 % 6.5 % 5.8 % 6.6 % 8.0 % -1.5 % 9.9 % 5.6 % 12.6 % -4.0 % -2.0 % 0.0 % 2.0 % 4.0 % 6.0 % 8.0 % 10.0 % 12.0 % 14.0 % 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 • The investment return for the whole year was 12.6% in 2021 • Equity investments succeeded best, with a return of 25.2% last year. The return on real estate investments was 9.5%, other investments 7.4% and fixed income investments 1.6%. • In the fourth quarter, the investment return was 4.0%. Investment returns
- 5. 2021 – theyear of stimulus, vaccines and inflation -2% 0% 2% 4% 6% 8% 10% 12% 14% 01/2021 02/2021 03/2021 04/2021 05/2021 06/2021 07/2021 08/2021 09/2021 10/2021 11/2021 12/2021 Return development of Veritas investments 2021 Real rates start to rise US stimulus packages Interest rates stop rising Vaccinations begin Reported inflation rises rapidly Supply chains face increased disruptions Woes in China’s real estate sector Inflation expectations and interest rates rise again Omicron spreads Europe’s energy crisis Delta variant spreads
- 6. Monetary stimulus hascontributed to good investment returns 100 120 140 160 180 200 220 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 The return is calculated from 1 January 2012 to 31 December 2021. Nominal return Real return 10 years 7.2% 5 years 6.8% 10 years 5.9% 5 years 5.5% The cumulative investment return for a 10-year period is 99.5%
- 7. The share ofequity investments increased 32.1 % 44.4 % 15.7 % 7.4 % 0.4 % 33.7 % 45.4 % 15.3 % 6.8 % -1.2 % 34.2 % 46.2 % 15.2 % 7.5 % -3.1 % 30.2 % 47.4 % 15.6 % 8.7 % -1.9 % -10.0 % 0.0 % 10.0 % 20.0 % 30.0 % 40.0 % 50.0 % Fixed-income investments Equity investments Real-estate investments Other investments Effect of derivatives 31.3.2021 30.6.2021 30.9.2021 31.12.2021 Changes in portfolio allocation
- 8. Geographical distribution ofinvestments All investments Listed equities
- 9. Breakdown of investmentsat fair value ⁶ Includes items that cannot be allocated to other investment groups ⁷ Includes the effect of derivatives on the difference between risk-adjusted breakdown and basic breakdown. The effect may be positive or negative (+/-). When the effect is taken into account, the sums of the risk-adjusted breakdown and the basic breakdown are equal. ⁸ The relative proportion is calculated using the total of the line ‘Total investments at fair value’ as the divisor. The table has been compiled according to the guidelines of the Finnish Pension Alliance Tela. ¹ Includes accrued interest. ² Includes cash and bank balance as well as settlement receivables and liabilities. ³ Includes private equity and mezzanine funds. ⁴ Includes unlisted real estate investment companies. ⁵ Includes all types of hedge fund shares, regardless of the fund’s strategy. 2021 milj. € % milj. € % ⁸ % 1 361,3 31,1 1 322,2 30,2 1,6 Loan receivables ¹ 54,2 1,2 54,2 1,2 0,9 Bonds ¹ 1 069,1 24,4 1 030,0 23,5 1,9 Government bonds 612,4 14,0 573,3 13,1 0,8 Other bonds 456,7 10,4 456,7 10,4 3,2 Other money market instruments and deposits ¹ ² 238,0 5,4 238,0 5,4 0,4 Equity investments 1 951,0 44,6 2 072,2 47,4 25,2 Listed equities 1 550,7 35,4 1 671,9 38,2 23,8 Private equity investments ³ 354,8 8,1 354,8 8,1 31,1 Unlisted equities ⁴ 45,5 1,0 45,5 1,0 27,5 Real estate investments 683,8 15,6 683,8 15,6 9,5 Direct real estate investments 566,1 12,9 566,1 12,9 9,1 Real estate funds 117,7 2,7 117,7 2,7 11,3 Other investments 380,2 8,7 380,2 8,7 7,4 Hedge fund investments ⁵ 246,7 5,6 246,7 5,6 9,0 Other investments ⁶ 133,5 3,1 133,5 3,1 4,9 Total investments 4 376,2 100,0 4 458,4 101,9 12,6 Effect of derivatives ⁷ -82,1 -1,9 Total investments at fair value 4 376,2 100,0 Modified duration of the bond portfolio 4,7 Open currency position, % of the market value of investments 25,5 Fixed-income investments Basic breakdown Risk-adjusted breakdown Return 31 Dec 2021 31 dec 2021
- 10. Solvency was furtherimproved owing to the good investment performance 1) Veritas Pension Insurance and Pensions-Alandia merged on 1 January 2019. The figures for the previous years are Veritas figures before the merger. 2) The figures for 2011–2012 include the provision for pooled claims equated with solvency capital, which was EUR 73.3 million in 2011 and EUR 78.3 million in 2012. • The solvency ratio increased during the final quarter to 131.9%. • The solvency position was 1.8 at the end of the year. • The solvency capital stood at EUR 1 081.0 million at the end of the year. 100% 105% 110% 115% 120% 125% 130% 135% 140% 0 200 400 600 800 1 000 1 200 Solvency limit, EUR million Solvency capital, EUR million Solvency ratio, % (right-hand scale)
- 11. 2035 2030 2025 2021 Carbon neutral portfolio Shift tolow-carbon indices Carbon footprint -30% Carbon footprint -50 % Fossil free heating and electricity Carbon footprint -80% Carbon neutrality Direct real estate investments Listed equity investments Listed equity investments Base year 2020 Veritas climate roadmap
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- 13. Over EUR 600million paid in pensions Pensions and other claims paid 1), EUR million 1) The figures for 2017-2018 are pro forma figures (Veritas + Pensions-Alandia) Number of pensioners 1) 35714 36324 37118 37627 37965 20000 22000 24000 26000 28000 30000 32000 34000 36000 38000 2017 2018 2019 2020 2021 533.8 568.1 589.5 585.4 601.9 200.0 250.0 300.0 350.0 400.0 450.0 500.0 550.0 600.0 650.0 2017 2018 2019 2020 2021
- 14. Premiums written increasedto over EUR 600 million 567.1 588.6 592.7 551.6 614.3 300 350 400 450 500 550 600 650 2017 2018 2019 2020 2021 Premiums written 1, 2), EUR million 0 20000 40000 60000 80000 100000 120000 140000 2017 2018 2019 2020 2021 Number of pensioners Number of YEL policies Number of TyEL insured Number of insured persons 2, 3) 1) The figures for 2017–2018 are pro forma figures (Veritas + Pensions-Alandia). 2) The number of TyEL-insured persons in 2019-2021 is not fully comparable with the earlier years. The definition of this key figure changed in 2019 when the Incomes Register was taken into use.
- 15. TyEL payroll amountincreased by 5.3 per cent 2059.1 2133.1 2159.2 2131.4 2244.6 1000 1200 1400 1600 1800 2000 2200 2400 2017 2018 2019 2020 2021 TyEL payroll 1), EUR million 1) The figures for 2017–2018 are pro forma figures (Veritas + Pensions-Alandia). Number of TyEL policies 1) 8215 8711 8885 9385 9339 5000 5500 6000 6500 7000 7500 8000 8500 9000 9500 10000 2017 2018 2019 2020 2021
- 16. Number of entrepreneurcustomers continues to increase 276.0 276.4 289.6 295.6 302.5 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 2017 2018 2019 2020 2021 Reported income under YEL 1), EUR million 1) The figures for 2017–2018 are pro forma figures (Veritas + Pensions-Alandia). Number of YEL policies 1) 11516 12129 12940 13285 13859 5000 6000 7000 8000 9000 10000 11000 12000 13000 14000 2017 2018 2019 2020 2021
- 17. Result Result analysis, EURmillion 2021 2020 Technical underwriting result 8,7 2,3 Return on investments at fair value 192,6 70,0 + Net return on investments at fair value 490,3 206,4 - Return requirement on technical provisions -297,6 -136,4 Loading profit 2,0 1,8 Other profit -0,4 1,7 Total result 202,9 75,8 Operating income covered by expense loading component, EUR million 18,2 17,5 % of the expense loading component 90,3 % 90,5 % Number of employees (average) 157 157
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