The merger between Finnish pensions insurer Veritas and smaller pension fund Pensions-Alandia will increase the larger firm’s competitiveness, boost solvency and cut costs, Veritas has said.

The pension provider announced that the Finnish Financial Supervisory Authority had approved the merger, which was initially announced earlier this year.

Veritas chief executive Carl Pettersson said: “The merger is clearly increasing our competitiveness. Thanks to this we can improve our cost percentage by three to four percentage points.”

“Our solvency ratio also rises by about one percentage point,” he added.

When Pension-Alandia’s current customers become Veritas customers on 1 January, there will be an increase of around 10% in the company’s insurance portfolio and investment portfolio, Veritas said.

The firm said the improved cost ratio was partly due to more efficient administration, with the merger leading to about €1m in administrative savings annually. This would be transferred in full to customer repayments, Veritas said.

“For our customers, the merger means, above all, that they pay lower premiums,” Pettersson said, adding that refunds were an important competitive factor.

“We are already gaining the industry’s highest rating for our customer service and now becoming significantly stronger also in terms of refunds,” he said.

Merger preparations were in full swing, the insurer said, and at the turn of the year Pension-Alandia’s three operations staff would be transferred to Veritas.

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