Varma’s solvency weakened since the start of the period, but the company’s solvency position remained good. The solvency capital, which serves as a risk buffer for investment operations and insurance risks, was EUR 7,870
million at the end of March, and pension assets in relation to the technical provisions were 121.6%. Varma’s solvency capital was on a sustainable level, i.e. 1.6 times the solvency limit. More information is available in our news release.
Strong solvency upholds confidence in pension provision. Better investment returns mitigate the pressure to increase pension contributions. Varma’s strong solvency benefits our clients through lower insurance contributions.
In good investment years, investment returns are used to increase the solvency capital, while in lean investment years, the solvency capital shrinks. Good solvency enables Varma to aim for higher returns by making higher-risk investments. As a rule of thumb, one percentage point more in investment returns in the long term means a two-percentage-point drop in pension contributions.