Financial Statement 2020: Value of Varma’s investments exceeded EUR 50 billion; return on investments 2.8 percent

In 2020, the return on Varma’s investments was 2.8 (12.0) percent or EUR 1.4 billion. The value of investments grew to EUR 50.2 (48.7) billion at the end of 2020, the year of the coronavirus.

“Despite the dire Covid-19 pandemic, Varma’s pension assets increased; our pension assets have never been higher than they are now. Especially important for the real economy and investment markets were the rapidly initiated strong stimulus measures,” says Varma’s President and CEO Risto Murto.

The Covid-19 pandemic had a negative impact on Varma’s investment returns in early 2020, but in the final quarter, the returns were back in positive territory. Solvency remained strong throughout the year and stood at 129.3 (130.8) percent at the end of December. Varma’s operational efficiency was also at an excellent level. In 2020, administrative costs totalled EUR 78 (86) million, which is 61 (62) percent of the expense loading included in the insurance contributions. The smaller the percentage is, the more efficient the company is.

“Finnish companies made it through the first Covid-19 year better than expected. Vaccines have been developed in record time, which will very likely give us a path out of the Covid-19 economic crisis,” says Murto.

Varma's return on investments 5.6 percent in the final quarter of the year

Varma’s return on investments stood at 2.8 (12.0) percent in 2020. The best returns were generated by unlisted equities, 8.6 (16.9) percent, private equity investments, 7.8 (15.1) percent and public-sector bonds, 6.1 (2.6) percent. The return on fixed-income investments was 1.9 (4.5) percent and on real estate 2.0 (4.1) percent. The return on other investments was -2.0 (4.5) percent, of which hedge funds accounted for -1.0 (5.0) percent.

“Varma's investments generated 5.6 percent in the final quarter of the year. Following the plunge in share prices in the spring, few people believed that investment returns would be back in positive territory at year-end.” In addition to equity investments, credit-risk-bearing asset classes, such as hedge funds, yielded positive returns towards the end of the year,” says Varma’s CIO Reima Rytsölä.

“So far, the investment market has not reacted to the delays in vaccine deliveries or the news on the virus variants. The rollout of the global vaccine programme would have to be swift for the investment market’s valuation levels to be in line with the real economy outlook,” Rytsölä adds.

Climate actions effective – carbon footprint of investments declines substantially

By the end of 2020, Varma achieved all the carbon footprint targets established in 2016 for different asset classes. In five years, the carbon footprint of Varma’s listed equity investments declined 29 percent and that of listed corporate bonds 23 percent. The CO2 footprint of real estate investments was down 47 percent compared to 2015. Investments have been focussed on low-emission investees, and real properties have increased the share of emission-free electricity and heat by using geothermal heat, among other measures. Varma aims for a carbon-neutral investment portfolio by 2035.

Client companies did better than expected in the first Covid-19 year

The coronavirus pandemic affected Varma’s employer and entrepreneur customers less than was anticipated at the start of the year. The number of pension insurance contribution enquiries increased during the year, but so far, the number of bankruptcies among Varma’s clients is fairly low.

Last spring, Parliament approved a temporary amendment to the Bankruptcy Act to limit, until the end of January 2021, a creditor’s right to petition for bankruptcy on the basis of the debtor’s temporary insolvency due to Covid-19.

“It is clear that many entrepreneurs and employers will continue to face difficulties in the coming spring, too. The most severe difficulties will be experienced by companies that were already in default before the start of the pandemic,” Murto says.

Varma gained a total of EUR 105 (144) million in new premiums written during the year. This includes the net impact of new sales and premiums written transferred from other pension institutions. Premium income stood at EUR 4.9 (5.3) billion. The change compared to the previous year is caused by the temporary insurance contribution reduction due to Covid-19, which also affected the amount of client bonuses. Accumulating client bonuses was not allowed in May-December as a result of the legislative amendment. Varma will refund EUR 54.2 (171.0) million to its customers in the form of client bonuses.

Varma paid out pensions in the amount of EUR 6.0 (5.9) billion to 347,100 (343,700) people. Varma’s total processing time for pension applications was down to 19 (25) days. At the end of 2020, 543,000 (541,900) individuals were insured by Varma.

Due to Covid-19, Varma employees switched to working remotely in spring 2020. Varma’s remote working practices have proved to be effective during the crisis, and the provision of earnings-related pension has continued without interruption. The annual PeoplePower Index, measuring Varma employees’ satisfaction and engagement, rose to a record high of 78.1 (75.2).

Varma Mutual Pension Insurance Company is a responsible and solvent investor. The company is responsible for the statutory earnings-related pension cover of some 900,000 people in the private sector. Premiums written totalled EUR 4.9 billion in 2020 and pension payments stood at EUR 6.0 billion. Varma’s investment portfolio amounted to EUR 50.2 billion at the end of 2020.

Further information:

Katri Viippola, Senior Vice President, Communications, HR and CSR, tel. +358 400 129 500 or katri.viippola(at)

Suvi Vesterinen, Communications Manager, tel. +358 40 555 8029 or suvi.p.vesterinen(at)


Financial Statement presentation (pdf)
Varma’s Report of the Board of Directors and Financial Statements 2020 (pdf)

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