Return on investments 6.5%

In 2006, Suomi Mutual's investment operations provided a 6.5% return. The solvency capital grew by EUR 92 million to almost EUR 1,460 million. Solvency capital is needed as a buffer to allow the company to manage periods of negative development in the investment markets.

At the end of the year, the current value of the company's investment portfolio was EUR 6,775 million. The investment portfolio grew by EUR 48 million. The performance of the investment operations was good in terms of both the return target determined on the basis of insurance savings and the return requirements for the company's equity, and in terms of benchmark indices.

The gradual reduction of the insurance portfolio will decrease the amount of solvency capital needed by the company. The solvency refunds to customers are, in practice, a considered reduction of the company's own capital. The capital is being reduced through a book loss. For this reason, even in a good year, the company will show a book loss in most cases. This is part of the planned operations of Suomi Mutual in its run-off state. The loss for the financial year was EUR 23 million. A more correct picture of the company's return can be obtained by looking at the sum of the additional benefits granted and the change in solvency capital. This sum showed a profit of EUR 406 million for the financial year.