Elo interim report 1 January–30 June 2024: Return on Investment was EUR 1.6 billion, or 5.2 per cent

The figures in brackets refer to the corresponding period in 2023 except where otherwise noted. 

Key figures January–June 2024

• The total result was EUR 563.4 (48.2) million.
• Net investment income was 5.2 (2.8) per cent, or EUR 1.6 billion. The market value of the investments was EUR 31.3 (30.0 at the end of 2023) billion. The average 10-year return on investment was 5.6 per cent. This corresponds to an average real return of 3.5 per cent.
• The operating expenses covered by the expense loading were EUR 37.8 (39.3) million.
• Premiums written amounted to EUR 2.2 (2.2) billion. A total of EUR 2.3 (2.2) billion was paid in pensions and other benefits.
• The solvency ratio was 122.8 (121.3 at the end of 2023) per cent and solvency capital was 1.4 (1.5 at the end of 2023) times the solvency limit.

Highest returns in listed equity investments

– Elo had a strong first half of the year. Investments generated good returns, the growth in new insurance sales was record-high and our expense loading fee is competitive, says Elo's CEO Carl Pettersson.

Elo’s equity investments generated a return of 8.0 (4.3) per cent. The best performing asset class was listed equities, with a return of 10.5 (6.7) per cent. The AI theme was the most significant driver of the equity market, and the returns were concentrated on a narrow group of AI-utilising companies and large technology companies. Elo’s fixed income investments generated a return of 1.5 (2.2) per cent. Elo’s government bond investments had a negative overall return whereas credit investments generated positive returns. 

The real estate investment market remained quiet during the first half of the year. The decrease in interest rates is expected to increase investor demand, and there were minor signs of the market picking up early in the summer. The return on real estate investments was 0.9 (0.2) per cent. 

Elo’s other investments generated a return of 7.7 (2.0) per cent. Other investments consisted mainly of hedge fund investments, which generated an excellent return of 7.7 (2.6) per cent. This result was achieved due to a good fund and strategy selection.

Elo’s total insured YEL income increased by 6.7 per cent 

– The market shares of new YEL and TyEL insurance sales increased. The market share of new sales for YEL insurance policies was 39.3 per cent and the market share in TyEL was 36.7 per cent at the end of June, says Pettersson.

The review of entrepreneurs' YEL income continued in the same way as last year. During the review period, the YEL income of about 5,900 entrepreneurs was checked. Elo’s total insured YEL income increased by 6.7 per cent in January–June. The amount of TyEL credit losses was at the same level as during the corresponding period in the previous year. The annual amount of credit losses is expected to increase slightly year-on-year.

The number of decisions on partial early old-age pension increased by 85.1 per cent

Elo issued more pension decisions than during the corresponding period the previous year. The number of decisions on partial early old-age pension increased by 85.1 per cent. Underlying the growth is the increased awareness among applicants of the possibility of applying for partial old-age pension, and people have also applied for early old-age pension to ease their personal financial situation. There was also an increase in the number of applications for vocational rehabilitation. Of the rehabilitees, 79 per cent returned to work, and 86 per cent of those who applied for rehabilitation themselves returned to work. 

Outlook

According to the economic forecasts, the recovery in international demand will start to stimulate Finland’s exports in the autumn, and the Finnish economy is expected to grow moderately in 2025. The improvement of purchasing power and the decline of interest rates on housing loans are prerequisites for better economic growth. As for investments, the turnaround is likely to be postponed to 2025. Unemployment will continue to increase in Finland this year. After the review period, uncertainty increased in the financial market in August, and the situation is unlikely to ease in the near future.

Elo will continue the efficient implementation of the employment pension system, and in accordance with the strategy, wants to increase its market share in TyEL insurance and maintain its position as the market leader in YEL insurance. Elo will continue to invest in the development of work ability services and create added value for customers to reduce work ability risks. In accordance with its strategy, Elo ensures adequate solvency and aims to achieve good returns on its investments in the long term.

Further information:
CEO Carl Pettersson, interview requests Communications Manager Miia Pullinen, tel. +358 40 588 3637

Interim Report 1 January - 30 June 2024 >

Interim Report Presentation 1 January - 30 June 2024 >