Finland’s non-life insurance sector solvency weakens

Written by Adam Cadle

19/09/2024

Finland’s non-life insurance sector solvency has weakened due to the increase in the solvency capital requirement, but remains at a good level, the country’s Financial Supervisory Authority has revealed.

The sector’s solvency ratio at the end of June was 247.1%, a decrease from 265.5% at the end of 2023. The solvency capital requirement was affected by the rise in the value of equity investments and the symmetric adjustment of the equity capital charge.

The return on investment in the sector was 2.9% in H1 2024, with most of the return being generated by equity investments. The return on real estate remained low but positive.

On the life insurance side, the solvency ratio was 233.8% in H1 2024, the same level as at the end of 2023. The rise in the risk-free yield curve decreased the amount of technical provisions and thus increased the amount of own funds. At the same time, the solvency capital requirement increased due to growth in equity risk, in particular.

Return on investment was 1.1% in H1 2024, with the majority of the return generated by equity investments. Return on real estate investment was still slightly negative in January-June. Unit-linked assets grew by 7.2% from the situation at the end of the year 2023, taking into account net subscriptions and increase in value. These investments accounted for 78.2% of the sector’s total investment assets.

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