Events

Suomi Mutual sold its foreign life companies

Suomi Mutual sold its life insurance companies operating in Poland and the Baltic States to the Vienna Insurance Group.

The deal, which was agreed at the end of 2007, was concluded in February for Sesam Life Insurance SE, which operates in the Baltic States, and in April for FinLife S.A. in Poland. In accordance with its objectives, Suomi Mutual thus exited from active involvement in life insurance abroad as well. In Finland, the company stopped underwriting new insurance policies from the beginning of 2005.

Changes in the Board of Directors

At the Annual General Meeting held in April, the Board of Directors was elected to hold office until the end of the next AGM. Ms Arja Alho, a long-term member of the Policyholders’ Representative Assembly, was elected as a new member and Deputy Chairman of the Board of Directors as the long-term Deputy Chairman, Mr Jarmo Rantanen, left the Board. Mr Jukka Tuori continued as Chairman of the Board and the other re-elected members are Mr Kari Kaunismaa, Mr Timo P Nieminen and Ms Helena Pesola.

Securing cumulative insurance savings before additional benefits

At the end of the year the Board of Suomi Mutual decided not to return solvency capital as a special additional benefit for 2008 because the primary objective set was to maintain a sufficient degree of solvency. In difficult times, sufficient solvency acts as a buffer to protect customers’ funds and enables good returns to be achieved as the markets recover. Over the three previous years the company has paid a total of almost a billion Euros in additional benefits.

Special additional benefits are previously conditionally promised benefits given to old insurance policies, which have been distributed from 2006. Old insurance policies are those policies that are still current and which were effective with Suomi Mutual on 1st July, 1997.

The annual return on the company’s old insurance policy savings is however at its best over 7 per cent, consisting of technical interest of 4.5% and a previously declared special benefit of 2.7%.

In 2006, the Board decided that the company would start to return solvency capital to other policies as well as the old insurance policies as customer bonuses. Technical interest on these insurance savings is paid at 3.5 to 4.5 per cent. Only for those insurance policies that have a technical interest rate of 3.5 per cent, a 0.7 per cent bonus will be paid for 2008. Decisions are taken annually about special additional benefits and customer bonuses and they can fluctuate significantly.