Finnish private sector pension insurer Varma has revealed in its preliminary figures that its 2008 return on investments was -15.2 per cent.

In 2007, this figure stood at six per cent, with a market value of €28.4bn. However, in 2008, this had dropped to €24.6bn by the end of the year.

Varma's solvency capital was 17.0 per cent, in relation to the technical provisions and 2.8 times the solvency limit. The figures, which are all preliminary, indicate that the company can set aside €37million, approximately 0.2 per cent, of the estimated payroll for client bonuses.

Matti Vuoria, president and CEO at Varma, said: "For an investor like Varma, the year was extremely challenging, which shows in the poorer results. As the investment environment has changed, we, too, have made substantial changes in the structure of our investment portfolio. Our equity weighting is now exceptionally low and we have also taken strong measures to hedge against the equity risk.

"Because of the exceptional market situation, we have made an estimated write-down on our results, which is directed at some of the investments we have made in private equity funds and international real estate funds."

In terms of acquiring new clients, Varma broke all records, with an expected total of premiums written of €3.4bn, an increase of eight per cent on 2007. Loading profit, a measure of operational efficiency, is also predicted to hit €35million, another record for Varma.

309,000 people received pensions from Varma at the end of 2008, with particularly strong growth in the number of old-age pensions, the organisation said.

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