Managing Director’s Review

Fennia Life’s business developed favourably

HFIn 2018, Fennia Life celebrated 20 years of operations. The company’s business covers voluntary life insurance, pension insurance and life insurance savings policies as part of the Fennia Group’s service offering.

Fennia Life’s business developed favourably, and the company’s result for the year was good, totalling EUR 22.6 million (EUR 15.5 million). Measured in terms of expense loading, operating income grew 3.7 per cent on the previous year, amounting to EUR 17.5 million (EUR 16.9 million), and the company’s expense ratio improved to the best level in the last ten years, at 90.2 per cent (92.1 %). The SCR ratio, which describes the company’s solvency, was 223.7 per cent (203.3 %) at the turn of the year, which can be considered a strong figure.

Investments yielded a return of 2.4 per cent (3.3 %) in a challenging market. The return on the equity markets in 2018 was negative, and interest income was still at a historically low level. The returns on the company’s investment operations were improved by the sale of subsidiary Fennia Asset Management Ltd’s share capital to parent company Fennia Mutual Insurance Company as part of an inter-group transaction.

During the year under review, the company’s development was in line with both the targets of the 2018–2022 strategy period and the Group strategy. Of course, reaching all of the targets will still take some time. Fennia Life’s main goals during the strategy period are to increase the volume of our operations, the expense loading, and to significantly further improve the expense ratio, which is intended as means of safeguarding the company’s future cost-competitiveness. Last year, the company’s investments were aimed at digitalising our operations in order to automate and boost the efficiency of our business processes and to meet the needs of online services and online customer service, which our customers are hoping for. Investments in these areas continue this year, too, and the intention is also to launch new services.

Fennia Life’s outlook for 2019 is positive. Part of the reason for this is the acquisition at the end of 2018 in which parent company Fennia Mutual Insurance Company acquired the entire share capital of Folksam Non-Life Insurance. We will also offer Fennia Life products to these new non-life insurance customers. On the other hand, the development of the Finnish economy is expected to be reflected in Fennia Life’s business operations. In terms of the capital markets, a potentially weaker latter part of the year may have a negative impact on the company’s operations and could affect asset management, investment insurance sales and balance sheet investment returns alike.

Our vision is to provide the best customer experience, and we work hard to achieve that. Fennia Life did well in a survey carried out by Taloustutkimus comparing Finnish life insurance companies, being rated second-best in the sector by corporate customers. According to the survey, Fennia Life was top-ranked in the areas of expertise, problem solving, service orientation and trustworthiness. I express thanks to our personnel and our administration for their good work contribution, and thanks to our customers for their good co-operation this year.


Alexander Schoschkoff
Managing Director