Value of Varma’s investments remains stable in an unsettled market

The return on Varma’s investments in January–March was -0.1 (0.0) per cent. The value of Varma’s investments was EUR 67.9 (68.3 on 1 Jan) billion. 

“Varma’s investments retained their value despite the uncertain market environment. The biggest risk right now is the war in Iran. The long-term shutdown of the Strait of Hormuz would be a serious setback also for Finland’s economy,” says Varma’s President and CEO Risto Murto. 

Of Varma’s investments, positive returns were generated by private equity (2.2 per cent) and hedge funds (1.6 per cent), as well as Finnish equities. Equities yielded -0.2 (-1.0) per cent, fixed income investments -1.2 (1.0) per cent and real estate investments -0.3 (0.8) per cent. 

“Since the end of February, the markets have been dominated by a single theme: the impact of the war on energy prices and supply. So far, the equity markets have moved within the normal fluctuation range, but inflation risk is already evident in the rising interest rates. The decisive factor for the equity markets is how long the crisis will last,” says Deputy CEO Markus Aho.

Varma’s solvency remained at a secure level: at the end of March, the solvency ratio was 134.7 (135.7 on 1 Jan) per cent, and solvency capital was EUR 17.7 (18.2 on 1 Jan) billion. 

Varma concluded the sale of its residential portfolio to Lumo 

Varma sold its residential property portfolio to Lumo Housing plc and at the same time increased its holding in the parent company Lumo Homes plc. Varma continues its residential investments as a major shareholder in Lumo Homes. 

The pension system must be developed consistently and for the long term  

At the end of March, a government proposal on pension reform was submitted to the Finnish Parliament. The pension reform will enter into force on 1 July 2026. The main changes concern the regulation of investment activities, and no changes will be made to pension benefits or contributions. 

“The pension reform is significant as it focuses on investment regulation. It strengthens the system by providing more leeway in investment activities and improving the conditions for pursuing long-term returns. Varma is well-prepared for its implementation,” says Murto.

“The lively discussion this spring regarding the retirement age and cuts reflects the pressure to find quick solutions for the state budget. However, the pension system operates on a decades-long time span. It is vital that a long-term perspective remains the starting point for developing the pension system in the future as well,” stresses Murto.

Varma achieved its climate targets ahead of the set schedule 

In March, we published our 2025 review of responsible investment, in which we report on the achievement of our key targets.  

Varma has been progressing in its climate targets faster than the set schedule. The share of climate allocation in the investment portfolio is already close to 50 per cent. Varma has also achieved the carbon intensity target set for its listed investments, which was to reduce the carbon intensity of listed investments by 40 per cent by the end of 2025 compared to the 2016 level. 

Significant increase in years-of-service pension  

In January–March, Varma issued a total of 13,700 pension decisions. The number of applications and decisions related to partial early old-age pension rose by more than a third compared to the same period last year. Last year, Varma received fewer applications than usual for partial early old-age pension, because no new age cohort reached the lowest age of eligibility for this pension benefit in 2025. 

Among the less common pension benefits, the number of years-of-service pension applications increased by over 50 per cent compared to the same period last year. This growth had already accelerated in 2025, when Varma received 211 applications.

The years-of-service pension can only be granted to an individual over 63 years of age who has performed work that requires great mental or physical effort for at least 38 years and whose work ability has permanently weakened due to illness or injury. The years-of-service pension converts into an old-age pension after the individual reaches their statutory retirement age. 

 Additional information:        

Hanna Kaskela, Senior Vice-President, Sustainability and Communications, tel. +358 40 584 5045 or hanna.kaskela(at)varma.fi         

Marjut Tervola, Communications Manager, tel. +358 45 673 0120 or marjut.tervola(at)varma.fi