Preliminary Information: Suomi Mutual's Return on Investments –4.0%

22 January 2008

In 2008, return on investments at current values of Suomi Mutual Life Assurance Company (Suomi Mutual) stood at –4.0 per cent. The return was considerably enhanced by the return on fixed-income instruments acquired to hedge technical provisions. Without these instruments, the return would have stood at –8.9 per cent. However, the result is much lower than targeted.

A year earlier, the company's return on investments was 5.6 per cent.

Markku Vesterinen, President and CEO, describes the company's performance as weak, vis-à-vis the targets set for operations, albeit satisfactory in view of the current market conditions.

− Without hedging technical provisions, our return somewhat corresponded to the level of our benchmark indices. Equity hedges that we maintained throughout the year proved a marked success although bond and hedge fund investments were disappointing. In bond investments, growth in corporate bond margins eroded returns.

According to a decision issued in November, the company did not distribute solvency capital for the past year and therefore did not pay any supplementary special benefits to its policyholders, as against those paid in the previous three years totalling almost one billion euros.

− For practical reasons, we made decisions on supplementary special benefits on the basis of the situation prevailing in October, when the company's solvency was lower than on 31 December. In the present circumstances characterised by much uncertainty about the future economic development, our primary aim is to secure our clients' savings. Moreover, we want to maintain opportunities to increase risk in a controlled way when the time is ripe, in order to be able to pay good profits to our clients.

According to preliminary figures, the company's solvency ratio stood at 19.9 per cent on 31 December 2008, compared with 22.4 per cent the year before.

The balance sheet total at current values on 31 December 2008 stood at EUR 6.0 billion.

The figures are tentative. A press release on Suomi Mutual's annual accounts for 2008 will be disclosed in March 2009.

FOR FURTHER INFORMATION, PLEASE CONTACT:
Markku Vesterinen, President and CEO, tel. +358 (0)10 253 2844 or +358 (0)50 348 3502
Timo Hukka, Chief Investment Officer, tel. +358 (0)10 253 2002 or +358 (0)40 519 0510