Varma Mutual Pension Insurance Company
This article contains paid contributions.
|Risto Murto (CEO), Jari Paasikivi (Chairman of the Board)|
|Revenue||€7,828.1 million (2019) |
|€2,197.5 million (2019) |
|€6.7 million (2019)|
|Total assets||€39,513.5 million (2019)|
Number of employees
|550 (2020) |
Varma Pension Insurance Company (Finnish: Keskinäinen työeläkevakuutusyhtiö Varma) is one of the largest private investors and among the largest earning-related pension insurance companies in Finland. In addition to managing statutory TyEL insurance for employees and YEL insurance for the self-employed, Varma offers its customers statutory vocational rehabilitation and services relating to predicting and managing work ability risks. Varma is a mutual company and its head office is located in Salmisaari, Helsinki.
In 2019, Varma paid out pensions in the amount of 5.9 billion euros to 343,700 people and made 22,340 new pension decisions. Premiums written amounted to 5.3 billion euros, and at year-end 541,926 people were insured with Varma. In terms of turnover, Varma was the ninth-biggest company in Finland.
Varma started its operations in July 1998 when Pension Sampo and around two thirds of Pension Varma merged, creating Finland's largest earnings-related pension company called Varma-Sampo. Varma-Sampo changed its name to Varma on 31 December 2003. It was the largest earnings-related pension company in Finland. Matti Vuoria was appointed as Varma's President and CEO in 2004 when his predecessor Paavo Pitkänen retired. Before that, Vuoria was the Chairman of the Board of Fortum.
Risto Murto took on the post of Varma's President and CEO at the beginning of 2014 when his predecessor Matti Vuoria retired. Murto was previously Varma's Deputy CEO.
In 2016, Varma's investments yielded a return of 4.7 per cent. Their value amounted to 42.9 billion euros at year-end and the company's solvency amounted to 10.2 billion euros.
In the spring 2017 charging points for 250 electric cars were installed in Varma's parking facility. At the time the charging system was among the largest in the world. During April to June, Varma reduced its share weight by five percentage points by decreasing its holdings in US shares due to President Donald Trump’s inability to co-operate and resulting problems. Varma's return on investments stood at 7.8%. The value of Varma's investments grew to 45.4 billion euros, and solvency capital increased by 1.3 billion euros to 11.5 billion euros. The average annual real investment return of Varma's investments over five years had been 5.8 per cent, and over 10 years 3.0 per cent.
The plunge in share prices in late 2018 dropped Varma's return on investments to -2 per cent.
In early 2019, Varma generated its best half-yearly result in investment returns in 20 years: 6.9 per cent or 3 billion euros. Varma's full-year returns amounted to more than 5.2 billion euros, with the return percentage amounting to 12. Over 10 years, Varma's pension assets had generated a total return of 26 billion euros and the pension assets doubled. In December, Varma announced that it had created a new fund with the asset management company LGIM and index investment company Foxberry. The exchange-traded fund invests in the United States, and it extensively takes sustainability criteria into consideration. Varma invested 500 million euros in the fund listed on the London Stock Exchange.
Varma is one of the largest private investors in Finland. Varma invests the assets collected as pension contributions for current and future pensions. The company mainly invests in fixed income, equity, real estate investments, and in hedge funds.
Varma's investment assets amounted to approximately 48.7 billion euros in 2019. Varma's returns exceeded 5.2 billion euros. The investment class with the highest return was listed equities, with a return of 25.4 per cent; for unlisted equities, the return was 16.9 per cent and for private equity slightly over 15 per cent. The return on fixed-income investments was 4.5 per cent and on real estate 4.1 per cent.
Varma's real estate investment portfolio includes both direct real estate investments in Finland and domestic and international real estate funds. Varma's main business relays on its office and business premises but it provides also of rental housing.
In 2016, Varma invested in the TaunusTurm office property in central Frankfurt together with another pension insurance company Elo. Varma was the fourth-largest real estate investor in Finland in 2017. In 2019, the value of Varma's real estate investments portfolio totalled approximately 4 billion euros.
In 2016, Varma published a climate policy for its investments. In practice, the company committed to aligning its investment portfolio with the Paris climate agreement. Varma began to build its “sustainable development equity portfolio” in the summer 2016. The portfolio invests in companies that benefit from climate change mitigation, have clear targets concerning climate change or do not incur major costs from adapting to climate change. At the end of 2016, the value of the portfolio was approximately 300 million euros and it included developed market companies in several sectors, both manufacturing and consumer companies.
In 2017, the carbon footprint of Varma's listed equity investments declined by 27% compared to the 2015 baseline. This result was achieved by increasing the share of low-emissions industries and by avoiding emissions-intensive industries such as energy and mining.
In January 2019, Varma announced that it had updated its “investment blacklist” of its excluded investees. The tobacco industry and nuclear weapons were included on the list in 2004. The list has also included industry manufacturing controversial weapons (anti-personnel landmines, cluster munitions, chemical and biological weapons) for a long time. A new addition were companies that rely on coal- or lignite-based operations for more than 30 per cent of their net sales. In November Varma announced that it will revise its climate objectives to have a carbon-neutral investment portfolio by 2035. The aim was to focus on investments that mitigate the progress of climate change.
In 2020, Varma's goal was for its investment portfolio to be carbon neutral by 2035. For example, the heating of its real estate investments should be emission-free by 2030 and their electricity by 2025.
- Varma won a competition for Nordic investors in the “best sustainable investment act in 2016” category with its sustainability portfolio.
- In 2017, Varma was chosen as the best large customer service centre.
- In 2019, Varma won the climate change category in a competition for Finland's best sustainability reports.
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