Varma’s 2023 result: return on investments 6.0% – strong year-end performance driven by listed equities

In spite of economic challenges, Varma's investments showed an upward trend all through the year. The strong rise in share prices towards the end of the year was based on expectations of inflation levelling off and a return to a more moderate interest rate level. Varma’s solvency remained strong throughout the year.

In 2023, the return on Varma’s investments was 6.0 (-4.9) per cent. The value of Varma’s investments was EUR 59.1 (56.2) billion.   

“In terms of Varma’s investments, the year was successful, but the returns were mainly generated outside Finland. Finland’s economy and equity markets performed feebly. The higher interest rates clearly put the brakes on the economy,” says Varma’s President & CEO Risto Murto.  

Listed equities generated the best returns of Varma’s investments, at 10.3 (-16.8) per cent. The return on all equity investments was 8.6 (-8.7) per cent. Private equity investments yielded 5.5 (7.9), fixed income investments 5.6 (-5.2) and hedge funds 6.1 (2.3) per cent. Real estate investments were the only asset class to generate a negative return, at -4.3 (5.7) per cent.

“Once the rise in interest rates eased late in the autumn, the returns on equities started to grow strongly. We actually increased the weight of equities in our portfolio. There were some bumps along the way in the unstable environment, but on the whole, investment returns showed an upward trend during the year. The sentiment is more positive from the perspective of the investment markets than the real economy,” says Chief Investment Officer Markus Aho.

Varma’s solvency ratio was 130.4 (130.5) per cent, and solvency capital was 1.6 (1.8) times the solvency limit. Solvency remained strong throughout the year.

“Forecasts of global recession have been repeatedly pushed back, but in the light of the indicators, there is still no major risk of a recession in sight. Following the levelling off of inflation and interest rates, we are in an environment of muted, but for the moment stable, economic growth. Geographical differences remain high and geopolitical risks are elevated,” says Aho.

“Finland’s economy is more muted than the global economy. Positive expectations in Finland’s economy have been driven by investments in the green transition, but the higher interest rate level and subsidy competition between economies have clearly hindered the projects’ progress. We can only hope that a true decline in interest rates will revive the projects,” says Murto.

Strong payroll development continued despite Finland’s economic situation

The TyEL payroll of Varma’s client companies grew 5.2 per cent in 2023, in spite of the state of the Finnish economy. Payroll growth decelerated marginally towards the end of the year. The positive development of the TyEL payroll strengthens the pension system, as the payroll forms the basis for pension contributions.

2023 was very good for Varma in terms of client acquisition, and in line with its strategy, Varma was successful in SME client acquisition. The net impact of sales to new clients and the transfer business between pension companies on TyEL premiums written was EUR 98.4 million. The corresponding impact on YEL premiums written was EUR 33.1 million.

First year of entrepreneurs’ YEL income reviews went as planned

Varma started the regular reviews of entrepreneurs’ YEL income in 2023. Following an amendment to the Self-Employed Persons’ Pensions Act (YEL) in 2022, earnings-related pension companies are obligated to review entrepreneurs’ YEL income every three years and confirm it to reflect their actual work input.

The first year of reviews went as planned, and Varma reviewed the YEL incomes of 12,000 self-employed persons. The average increase in income was EUR 3,870. The income of 15 per cent of the reviewed entrepreneurs matched the value of the work input, and no changes were made.

In 2024, Varma will review the income of 8,000 entrepreneurs. The purpose of the legislative amendments is to improve the pension and social security of the self-employed and support the implementation of YEL.

Official validation for science-based emission reduction targets in accordance with the SBTi

Varma is committed to reducing its greenhouse gas emissions in line with the Paris Agreement and has therefore joined the international SBT initiative (SBTi). The SBTi determines the emission reduction targets on a scientific basis.

“As proof of our long-term work for climate and environmental values, Varma is Finland’s first and the world’s third pension insurance company to receive official validation for its emission reduction targets, which are based on the Science Based Targets initiative (SBTi). We have a clear target to work towards,” says Murto.

Alongside climate targets, Varma’s environmental sustainability is guided by attending to biodiversity. In 2023, Varma looked into its investee companies’ approach to how they take biodiversity into account in their operations.

Second highest number of partial old-age pension applications ever

Partial old-age pension continued to be popular in 2023, although applications were down 37 per cent from the previous year. The number of applications (4,778) received by Varma was the second highest ever. The increase compared to 2020 and 2021 was over 80 per cent. At the moment, partial old-age pension can be applied for at the earliest at the age of 61, and the amount withdrawn can be 25% or 50% of the accrued pension without giving up working.  

At the beginning of 2024, a 5.7 per cent index increase was made to pensions. This did not have a significant effect on the number of old-age pension applications at the end of the year. At year-end, Varma was paying out pensions to 350,500 (352,200) people.

The number of disability pension applications increased by 3.9 per cent. The number of new disability pension applications received by Varma increased 5.5% from the previous year. The biggest growth was seen in the 25–34 age group. Applications from over-60-year-olds also increased. In this age group, the growth focussed on men.

Mental health disorders were the primary reason for new disability pensions among all age groups under 45.

Varma Mutual Pension Insurance Company is a responsible and solvent investor of pension funds. The company is responsible for the statutory earnings-related pension cover of 980,000 people in the private sector. Premiums written totalled EUR 6.5 billion in 2023 and pension payments stood at EUR 7.1 billion. Varma’s investment portfolio amounted to EUR 59.1 billion at the end of 2023.   

Additional information: 

Hanna Kaskela, Senior Vice President, Sustainability & Communications, tel. +358 40 584 5045 or  hanna.kaskela(at)      

Marjut Tervola, Communications Manager, tel. +358 45 673 0120 or marjut.tervola(at)   


Financial Statements presentation   

Report of the Board of Directors and Financial Statements 2023

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