LocalTapiola Life generated a good result for the first half of the year. Investment activities were successful and market share strengthened in the focus area of term life insurance.
LocalTapiola Life's operating profit rose to EUR 126.8 million (EUR 77.0 million) and its overall result was EUR 89.7 million (EUR 70.4 million).
The growth in operating profit was largely due to successful investment activities. Net investment income at fair value was 3.6 per cent (3.1%) for the first half of the year. Significant changes were made to the investment portfolio in the first half of 2015. In terms of fixed-income investments, the weighting of government bonds was reduced from the beginning of the year while the weighting of corporate bonds increased.
Premium income increased by 12.7 per cent to EUR 224.0 million (EUR 198.9 million). LocalTapiola Life showed most growth in its focus area of term life insurance, which saw premium income increase by 9.6 per cent, a figure that was well above the average growth for the sector of 4.2 per cent.
Solvency capital accounted for 28.5 per cent of technical provisions (26.3% in December 2014).
The expense ratio increased to 128.7 per cent (124.1%). The increase in the expense ratio is due to a growth in sales and investments in sales channels. Other operating expenses decreased by 12.1 per cent.
"This good result is due to investments in sales and product development. In January, we began using a new sales channel that specialises in sales of life insurance to private customers. The Private Banking channel has been improved by increasing the number of personnel, expanding service concepts and strengthening cooperation," says Minna Kohmo, Managing Director of LocalTapiola Life.
"The product range has been supplemented with insurance policies intended for companies to cover serious illnesses and capital redemption contracts intended for investors focusing on residential property investments. The residential property investment product was created in partnership with LocalTapiola Real Estate Asset Management Ltd," says Kohmo.
"In June, we began a pilot project in Greater Helsinki and the Oulu region entitled Smart Life Insurance. The goal of the pilot is to investigate possibilities of integrating well-being services into life insurance. Customers involved in the project receive an activity tracker and participate in online physical examinations and training. Customers and the media have been very interested in this service, which is unique on the Finnish market," Kohmo says.
"LocalTapiola intends to change its role with the aim of making a positive impact on Finnish well-being. In addition to carrying out the basic duties of an insurance company – insuring customers against risk and paying compensation – we aim to be involved in developing the beginning of the treatment chain, with a particular focus on proactiveness and creating well-being," says Kohmo.
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