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Published: 31 October 2019

Profits of insurance companies declined in 2018

Non-life insurance, life insurance and employment pension insurance companies’ combined profit for the financial period declined in 2018 to EUR 0.9 billion from the previous year's EUR 1.3 billion. Insurance companies’ investment assets amounted to EUR 126 billion on 31 December 2018. In addition, life insurance companies had investments covering unit-linked insurances to the tune of EUR 36 billion.

Insurance companies’ investment allocation on 31 December 2018, EUR million

Employment pension insurance companies

Employment pension insurance companies’ premium income and claims paid comprise of statutory pension insurance. Premium income and claims paid continued growing in 2018. Premium income grew by 5.0 per cent to EUR 14.8 billion. Claims paid, in turn, increased by 3.8 per cent to EUR 15.4 billion. Claims incurred, which in addition to claims paid, include change in the provision for outstanding claims, grew from the previous year by EUR 2.4 billion to EUR 16.8 billion.

The net income of investments decreased to EUR 1.3 billion from EUR 8.7 billion in 2017. The income of investments fell by 10.2 per cent while their expenses increased by 16.5 per cent.

At the end of 2018, technical provisions totalled EUR 100.7 billion. The growth from the year before amounted to 1.6 per cent.

Life insurance companies

Life insurance companies’ premium income contracted in 2018 from the year before and direct income claims paid increased. Premium income totalled EUR 4.4 billion and claims paid EUR 4.6 billion.

The net income of investment activities dropped from the previous year by 139 per cent to EUR -1.2 billion. The income contracted by 18.8 per cent to EUR 2.1 billion and the expenses rose by 34.3 per cent to EUR 1.7 billion. The net effect of investments’ unrealised value changes and value increases and their adjustments on the net income of investment activities declined by 192 per cent from the year before and amounted to EUR -1.6 billion. The balance sheet value of investments continued declining. The investment assets of life insurance companies totalled EUR 18.3 billion at the end of 2018, while in 2017 it stood at EUR 18.6 billion.

Life insurance companies’ technical provisions without unit-linked insurances diminished from the year before by 5.4 per cent to EUR 16.8 billion. Total technical provisions decreased by 4.4 per cent to EUR 53.1 billion.

The year 2018 was profitable for life insurance companies. The profit for the financial period grew to EUR 661 million from the previous year's EUR 598 million, remaining close to the same level as in 2017.

Non-life insurance companies

A company restructuring was made in the non-life insurance segment in the last quarter of 2017, which had an effect on the combined financial statement figures of non-life insurance companies.

Non-life insurance companies’ premium income fell by 18 per cent to EUR 3.3 billion from one year ago. Claims paid went down by 5.6 per cent to EUR 2.5 billion. In most insurance classes, premium income and claims paid fell, but in terms of claims paid other property damage increased.

Operating expenses fell from EUR 847 million in 2017 by 10.7 per cent to EUR 756 million. Assets covering technical provisions after the equalisation provision were EUR 38 million lower than in 2017, EUR 127 million.

The net income of investment activities decreased by 68 per cent to EUR 223 million. The income contracted by 42 per cent to EUR 635 million, while the expenses rose by 5.2 per cent to EUR 412 million. Sales profits depressed the income of investment activities significantly. Sales profits declined in 2018 to EUR 249 million from the previous year's EUR 450 million.

Non-life insurance companies’ profit/loss for the financial period decreased clearly by 63.6 per cent from EUR 704 million in 2017 to EUR 256 million in 2018. The company reorganisation that took place at the end of 2017 should be born in mind when examining these figures.

The balance sheets of non-life insurance companies remained almost at the same level as in 2017, amounting to EUR 13.7 billion at the end of 2018. In turn, investment assets increased by 3.2 per cent to EUR 11.5 billion. On the liability side of balance sheets, technical provisions amounted to EUR 9.6 billion, the same as one year earlier. Own equity remained on level with the year before, amounting to EUR 3.2 billion.

More detailed information on insurance activities can be found in the database and appendix tables of the statistics and from the web pages of other organisations that produce insurance data (see in the left-hand menu under "Links" of the statistics' home page). The statistics on insurance activities cover activity data of employment pension insurance, life insurance and non-life insurance companies, such as profit and loss account, balance sheet, investments and class of insurance specific data. The data are based on the Financial Supervision Authority's data collection on domestic activities of corporations engaged in the insurance markets. The financial statement structure differs in many respects between employment pension insurance, life insurance and non-life insurance companies. The data concerning life insurance and non-life insurance companies also include branches abroad. For more information about the statistics and financial statement concepts, see the statistics homepage under “Quality description”.

Source: Insurance Activities 2018, Statistics Finland

Inquiries: Heidi Lauttamäki 029 551 3029, Jarkko Kaunisto 029 551 3551, rahoitusmarkkinat@stat.fi

Director in charge: Ville Vertanen

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Appendix tables

• Appendix table 1. Balance sheets of insurance companies 2018, EUR million (31.10.2019)
• Appendix table 2. Investment income of insurance companies 2018, EUR million (31.10.2019)
• Appendix tabel 3. Insurance class-specific data of life insurance companies 2018 (31.10.2019)
• Appendix tabel 4. Insurance class-specific data of non-life insurance companies 2018 (31.10.2019)

Figures

• Appendix figure 1. Distribution of insurance companies insurance premiums, EUR million (31.10.2019)
• Appendix figure 2. Distribution of insurance companies claims paid, EUR million (31.10.2019)
• Appendix figure 3. Insurance companies net profits from investments, EUR million (31.10.2019)
• Appendix figure 4. Non-life insurance companies premium income - class-specific data, EUR million (31.10.2019)
• Appendix figure 5. Life insurance companies number of insured in 2018 - class-specific data, pcs (31.10.2019)

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Updated 31.10.2019