- LocalTapiola General’s operating profit during the review period was EUR 143.2 million (EUR 84.1 million). The overall result was EUR 123.3 million (EUR 79.3 million).
- LocalTapiola General’s combined ratio, excluding the unwinding of discount expenses, was 96.3 per cent (98.3%).
- Including figures from the regional companies, LocalTapiola Group's operating profit increased to EUR 196.7 million (EUR 130.5 million).
- The Group’s combined ratio excluding the unwinding of discount expenses was 93.7 per cent (94.6%).
- LocalTapiola Life's operating profit rose to EUR 126.8 million (EUR 77.0 million). The overall result was EUR 89.7 million (EUR 70.4 million).
- The amount of customer funds managed by LocalTapiola Asset Management increased to EUR 9.7 billion (EUR 9.1 billion in December 2014).
- The market value of the direct real estate assets managed by LocalTapiola Real Estate Asset Management increased to EUR 3.3 billion (EUR 3.2 billion in December 2014).
"LocalTapiola Group's result for the first half of the year was good. Customer numbers have begun to increase, premium income from non-life insurance is rising more quickly than average for the sector, LocalTapiola Life's sales of risk insurance are continuing to increase and total operating expenses are decreasing according to plan," says Erkki Moisander, President of LocalTapiola Group.
The total premium income from primary insurance policies written by LocalTapiola Group's non-life insurance businesses – the regional companies and LocalTapiola General – increased by 3.6 per cent to EUR 692.3 million (EUR 668.1 million). Premium income for the sector as a whole in Finland, as measured by cash flows, increased by 2.7 per cent.
The Group's non-life insurance operations generated a profit of EUR 196.7 million (EUR 130.5 million). The combined ratio of the Group's non-life insurance operations, excluding the unwinding of discount expenses, was 93.7 per cent (94.6%).
"Our health and welfare strategy is progressing. The TerveysHelppi service is now in use in all of the regional companies and has garnered good feedback from customers. We are constantly developing new services, the newest of which is a service related to working capacity, which was created to meet the needs of companies," says Moisander.
“Our customers have welcomed our cooperation with S Group. The result is a unique entity. This is not just our view of the matter; according to a consumer survey by TNS, Omaetu does most to reinforce customer loyalty and the S-Etukortti is the most frequently recommended customer loyalty programme. S-Bank is also on the up," Moisander says.
"Digitalisation is currently one of the biggest issues in the insurance sector. Customers already use various monitoring tools and linking these to customers' security or insurance contracts is one possibility. One example of this is our Smart Life Insurance pilot project, which began in June and aims to encourage customers to take care of their own well-being. As part of the pilot, we are studying customers' attitudes to sharing health data with insurance companies and the types of benefit that customers expect to receive in return."
LocalTapiola General’s operating profit during the review period was EUR 143.2 million (EUR 84.1 million). The overall result was EUR 123.3 million (EUR 79.3 million). Premium income from direct insurance increased by 4.0 per cent to EUR 359.4 million (EUR 345.6 million). The combined ratio excluding the unwinding of discount expenses was 96.3 per cent (98.3%).
LocalTapiola General's investment income at fair value was 3.5 per cent (2.8%).
At the end of the review period, LocalTapiola General's solvency ratio before business transfers was 319.1 per cent. After business transfers, the solvency ratio was 307.6 per cent (307.8% in December 2014).
"The result for the first half of the year was good. Premium income from employers’ liability insurance increased by five per cent. We were successful in terms of transferred policies as measured in euros and in customer numbers. The result shows that we have made an effort to understand our customers' businesses and needs, and that we have improved our operating methods and services as a result," says LocalTapiola General's Managing Director, Jari Sundström.
"Businesses continue to have low growth outlooks, which may become particularly manifest in the premium income from employers' liability insurance. However, a weak economic climate usually ensures that claims trends remain moderate," says Sundström.
At the end of June, LocalTapiola General handed over the insurance policies and technical provisions related to its non-life insurance portfolio in Greater Helsinki to LocalTapiola Pääkaupunkiseutu.
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. 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 opportunities for integrating well-being services into life insurance. Customers and the media have been very interested in this service, which is unique on the Finnish market," Kohmo says.
The amount of customer funds managed by LocalTapiola Asset Management increased to EUR 9.7 billion (EUR 9.1 billion in December 2014). LocalTapiola Asset Management generated a good result for the first half of the year, amounting to EUR 2,457 thousand (EUR 5,750 thousand) with an operating profit of EUR 3.1 million (EUR 7.2 million). The figures for the comparison period include the sale of the mutual fund business to FIM Asset Management Ltd.
The company's solvency at the end of the review period was excellent. The ratio of total own funds to risk-weighted items was 46.2 per cent.
"LocalTapiola fund customers gained a new service channel at the end of October when we opened a new online service for owners of LocalTapiola fund units. The new online service is free of charge and users can log in using online banking codes issued by any bank," says Tom Liljeström, Managing Director of LocalTapiola Asset Management Ltd.
Turnover increased to EUR 7.7 million (EUR 7.1 million in December 2014). The operating profit was EUR 1.9 million (EUR 1.8 million). The quick ratio was 7.0 (5.1). The cost/return ratio remained at the same level as in the previous year: 0.75.
The market value of the direct real estate assets managed by LocalTapiola Real Estate Asset Management increased to EUR 3.3 billion (EUR 3.2 billion). Leasable area decreased by 6.6 per cent to 1.2 million square metres (1.3 million sq. m.) when one major customer relationship came to an end. The proportion of the portfolio accounted for by buildings under construction increased. LocalTapiola Real Estate Asset Management manages seven real estate equity funds (6 funds).
"The value of assets under management by LocalTapiola Real Estate Asset Management increased to EUR 3.3 billion. Turnover developed in accordance with strategic objectives thanks to increased real estate equity fund operations, while operating profit remained good. There is a record number of new projects for construction underway," says Vesa Immonen, Managing Director of LocalTapiola Real Estate Asset Management Ltd.
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