ILMARINEN JANUARY− SEPTEMBER 2015 Press Conference 23.10.2015 / Timo Ritakallio, President and CEO

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DROP IN SHARE PRICES FELT IN INVESTMENT RETURNS

January−September 2015

• Investment return 3.1%

– Return on equity investments 5.5%

– Return on fixed income investments 0.1%

– Return on real estate investments 4.3%

• Long-term return at a good level

– Nominal return 5.9%

– Real return 4.1%

• Solvency 28.6%

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KEY OBSERVATIONS ABOUT THE OPERATING ENVIRONMENT

January−September 2015

• Equity markets experienced the weakest

quarter in four years

• Equity markets were unnerved by concerns

over the slowing down of China’s economic

growth and its repercussions on global

economic growth

• Interest rates remained at a low level

• Finland’s economic growth remained weak

and unemployment rate increased

3

MARKET VALUE OF INVESTMENTS EUR 35.2 BILLION

Asset allocation according to risk

4

27,485

29,520

32,266

34,196 35,181

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

31.12.2011 31.12.2012 31.12.2013 31.12.2014 30.9.2015

EU

R m

ill.

Osakesijoitukset Kiinteistösijoitukset Muut sijoitukset Korkosijoitukset ml. johdannaisten vaikutus

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Equities and shares Real estate Other Fixed income incl. effect on derivatives

QUARTERLY INVESTMENT RETURNS IN 2015

5

7.1

-0.8

-3.0

3.1

-4

-2

0

2

4

6

8

Q1 Q2 Q3 1.1.-30.9.2015

REAL RETURN ON INVESTMENTS IN THE LONG TERM 4.1%

6

Net investment return at current value

%

9.0

13.8

16.1

2.8

-1.2 -0.5

8.7 7.9

12.1

8.5

5.7

-17.7

15.8

10.8

-4.0

7.5

9.8

6.8

3.1

8.1 9.6 10.5

4.5

1.8 2.4

7.7 7.8

11.1

8.8

5.2

-14.0

12.9

10.6

-2.3

8.6 7.6

6.8 5.9 4.1

-20

-15

-10

-5

0

5

10

15

20

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 30Sep2015

18.75years

Ilmarinen Muut Ilmarinen’s annual average nominal return (18.75 years) Ilmarinen’s annual average real return (18.75 years) Other

companies

LONG-TERM REAL RETURN REMAINED GOOD

7

0

20

40

60

80

100

120

140

-97 -98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11 -12 -13 -14 9

%

Ilmarisen reaalituotto 3,5 % reaalituottokertymä 4,0 % reaalituottokertymä

Cumulative return on investments 1997−30 September 2015

Ilmarinen’s real return 3.5% cumulative real return 4.0% cumulative real return

VARYING INVESTMENT RETURNS DEPENDING ON PERIOD

8

Cumulative return on investments 1997−30 September 2015

0

1

2

3

4

5

6

7

8

1997 - 30.9.2015(18.75 yrs)

2000 - 30.9.2015(15.75 yrs)

2005 - 30.9.2015(10.75 yrs)

2009 - 30.9.2015(6.75 yrs)

2012 - 30.9.2015(3.75 yrs)

2014 - 30.9.2015(1.75 yrs)

%

Nominal return Real return

LONG-TERM AVERAGE RETURN 5.9%

9

% Ilmarinen Finnish

equities and

shares

European

equities and

shares

Euro Euro

government

bonds

corporate

bonds

9/2015 3.1 3.1 3.9 1.2 -1.9

2014 6.8 10.6 7.2 13.0 8.2

Average return over 5 years 5.2 7.1 9.1 5.3 4.3

Average return over 10 years 4.4 6.2 4.5 4.6 3.8

Average return since 1997 5.9 9.3 6.5 5.4 5.0

Real average return over five years 3.5 5.3 7.3 3.6 2.6

Real average return over 10 years 2.6 4.4 2.7 2.8 2.0

Real average return since 1997 4.1 7.5 4.8 3.7 3.2

SOLVENCY REMAINED GOOD

10

Solvency development

16.2

27.2

41.3

35.4

25.5

18.1

22.3

25.6

32.0 33.7

32.5

14.0

24.0

29.7

21.1

23.9

28.0 29.8

28.6

0

5

10

15

20

25

30

35

40

45

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 30.9.

% o

f te

chnic

al pro

vis

ions

Vakavaraisuuspääoma (Toimintapääoma v. 2012 saakka)

Tasausvastuusta toimintapääomaan rinnastettava osa

Vakavaraisuusraja

Solvency capital

Provision for pooled claims treated equal to solvency capital

Solvency limit

On 30 Sep 2015, the solvency ratio was 28.6 per cent (ratio of solvency capital to technical provisions).

The solvency position was 2.3 times the solvency limit.

INVESTMENT OPERATIONS Q3

Mikko Mursula, CIO

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RETURN ON INVESTMENTS JANUARY–SEPTEMBER 2015 3.1% Asset allocation and return

12

The modified duration of bond investments is 1.0 year. The total return percentage includes income, expenses and

operating expenses not allocated to any investment types.

Basic

breakdown

Risk

breakdown Return

EUR mill. EUR mill. %

Fixed-income investments 17,692.8 50.3 15,664.5 44.5 0.1

Loan receivables 1,519.8 4.3 1,519.8 4.3 3.2

Bonds 15,005.8 42.7 11,547.5 32.8 -0.4 1.6

Public corporation bonds 5,093.1 14.5 4,738.4 13.5 -0.9

Other bonds 9,912.7 28.2 6,809.1 19.4 -0.2

Other money market instruments and deposits 1,167.2 3.3 2,597.2 7.4 3.2

(incl. investment receivables and payables)

Equities and shares 12,563.4 35.7 12,113.7 34.4 5.5

Listed equities and shares 9,418.0 26.8 8,968.4 25.5 3.7 12.0

Private equity investments 2,001.7 5.7 2,001.7 5.7 18.7

Non-listed equities and shares 1,143.7 3.3 1,143.7 3.3 1.4

Real estate investments 3,103.3 8.8 3,103.3 8.8 4.3

Real estate investments 2,603.3 7.4 2,603.3 7.4 3.7

Real estate funds and joint investments 500.0 1.4 500.0 1.4 7.9

Other 1,821.1 5.2 3,157.8 9.0 13.1

Hedge fund investments 633.1 1.8 628.4 1.8 10.1 6.7

Commodity investments -11.2 -0.0 74.9 0.2 -

Other investments 1,199.2 3.4 2,454.6 7.0 17.3

Investments total 100.0 34,039.4 96.8 3.1 4.2

Effect of derivatives 1,141.2 3.2

Investments at current value 35,180.5 35,180.5 100.0

% % Volatility

PROPORTION OF EQUITIES AND SHARES DECLINED Asset allocation development

13

0

10

20

30

40

50

60

70

80

90

100

31.12.2011 31.12.2012 31.12.2013 31.12.2014 30.9.2015

%

Osakesijoitukset Kiinteistösijoitukset Muut sijoitukset Korkosijoitukset ml. johdannaisten vaikutusEquities and shares Real estate Other Fixed income incl. effect on derivatives

FINNISH EQUITIES AND SHARES INCREASED

14

0

5

10

15

20

25

30

35

40

45

Suomi Eurooppa USA Japani Kiina Kehittyvät markkinat pl.Kiina

%

31.12.2011 31.12.2012 31.12.2013 31.12.2014 30.9.2015

Geographical breakdown of equity investments

Finland Europe USA Japan China Emerging markets

excl. China

FINNISH EQUITY HOLDINGS EUR 2.9 BILLION

Most significant Finnish equity holdings

15

EUR mill.

30 Sep

2015

31 Dec

2014 Percentage

30 Sep

2015

31 Dec

2014

Sampo plcj A 217 223 Digia Plc 14.58 14.58

Nokia Corporation 184 359 PKC Group Oyj 12.19 12.23

Kone Corporation 168 212 Basware Corporation 10.76 10.70

Wärtsilä Corporation 141 148 Finnlines Oyj 10.58 10.58

Citycon Oyj 140 117 Technopolis Plc 10.41 10.41

Neste Corporation 131 73 Talentum Oyj 9.73 9.73

Stora Enso Oyj 126 79 Sotkamo Silver AB 8.72 8.72

UPM-Kymmene Corporation 119 176 CapMan Plc 8.32 8.32

Nokian Tyres Plc 111 64 Martela Corporation 8.07 8.07

Fortum Corporation 85 81 Munksjö Oyj 8.03 5.98

Investment markets and economic outlook

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CURRENT MARKET TOPICS

• Companies’ Q3 net sales and results

– Pace of economic growth

– Low interest rate level

– Low commodity prices

– Impacts of changes in exchange rates

• Pace of economic deceleration in China

• Central banks’ willingness and need for stimulus

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PROSPECTS FOR THE REST OF 2015 • The first interest rate hike by the US Federal

Reserve will be delayed until 2016

• The European central bank is continuing with its asset-purchase programme. Interest rates will remain low

• Share price volatility will continue, driven by macroeconomic news

• The share price level cannot withstand disappointing earnings or a drastic weakening of global economic growth

• In an environment of low interest rates, real assets continue to be a focus of interest

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