Elo delivers 3.9% investment return in Q1 despite Covid-19 impact

Finnish pension company, Elo, achieved an investment return of 3.9 per cent in Q1 2021, equal to €996.4m, despite the impact of the Covid-19 pandemic.

The market value of its investments stood at €26.8bn at the end of March 2021.

The company also reported a solvency ratio of 125 per cent, whilst its solvency capital is now 1.5 times the solvency limit.

According to the company, almost all asset classes delivered positive returns, with only the fixed income investments remaining slightly negative at -0.3 per cent.

In contrast, the company's equity investments secured a return of 7.8 per cent, real estate investments delivered returns of 0.9 per cent, while other investments achieved returns of 3.5 per cent.

The firm emphasised that the stock market has performed well over the early part of the year, with the rise in interest rates causing strong movements within the stock market, although yield differentials between geographical areas remained "relatively small".

Elo president and CEO, Hanna Hiidenpalo, commented: “Despite the shadow of the Coronavirus, global economic growth expectations rose in the first quarter of the year and the positive mood was also reflected in the stock market.

“Investment income was at a good level at the beginning of the year and our solvency strengthened from the turn of the year.

“The large-scale recovery of the US economy has had a significant impact on investment market movements at the beginning of the year.

“Expectations that inflation will accelerate and interest rates will continue to rise have affected the differences in returns between asset classes.”

Alongside its financial performance, Elo has confirmed that it paid out pensions totalling €905.7m between January-March, with customers receiving a decision on old-age pensions in an average of 2 days during this period, compared to the industry average of 11 days.

The number of new disability pension decisions and rehabilitation decisions, meanwhile, has decreased year-on-year, with 1,565 new disability pension decisions issued and 511 rehabilitation right decisions were issued.

This change was highlighted as “noteworthy” considering that the number of applications, especially in new disability pension decisions, has increased over the past few years.

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