The Finnish banking and insurance sectors have withstood the effects of the COVID-19 pandemic well despite the exceptional uncertainty in their operating environment. The Finnish Financial Supervisory Authority (FIN-FSA) published its overview of the state of the financial sector on 15 September.
In the non-life, life and workers’ compensation insurance sectors, the pandemic reduced premium income. The solvency of the companies was not jeopardised, however.
The return on the investments of pension institutions was burdened by the fall in equity prices in the first quarter. The risk-bearing capacity of the pension institutions nevertheless remains at a reasonable level. According to FIN-FSA, TyEL insurance premium income is forecast to fall this year for the first time since the financial crisis. This is the result of weakened employment and the temporary lowering of employers’ pension contribution payments.
The financial sector has actively contributed to the efforts to revitalise the Finnish economy after the coronavirus-induced financial crisis. In the first half of 2020, banks granted hundreds of thousands of grace periods and other flexible loan arrangements to households and businesses. Many pensions insurers, as major investors in rental properties, also offered more flexible arrangements to their tenants.