Good morning, and I'd like to welcome you to the investor presentation of third quarter 2020 of VÍS. First, the highlights of the quarter. Overall, it was a very good quarter for the company. Investment income of ISK 2 billion, and a 4.5% nominal return on investment. That we have a 60.2% return since the beginning of the year. Its equity, listed and unlisted, gives us strong results for the quarter, and it's also worth mentioning that the board has decided to start a share buyback of around ISK 1 billion to the end of the year. This, of course, still need to approve by the regulatory part. It's good to see the insurance being on a very positive side, combined ratio of 90.5% for the quarter. Strong underwriting result, claims ratio of 68.6%, the lowest in three years.
We are aiming on simplifying processes, changing how insurance works, and simply setting out a better insurance. We have been focusing on several insurance regarding that, and the newest one is the critical illness and life insurance, where we have made huge improvement in the process, which I will mention later in this presentation. It's also good to see how the developments of the driving behavior for those who are using Ökuvísir, and we see a great improving of driving for those who are using this app.
We continue our development of Ökuvísir, where we now have included in the app some kind of competition where you can compete who is the best driver within the group, which we to deliver, which we choose to compete within our family, for example. Full highlights for the quarter. The premium, ISK 5.9 billion. Profit of ISK 2.2 billion, an increase of ISK 1.2 billion comparing to last year.
Combined ratio, 90.5%, as said earlier. Return on investment, 4.5%. Return on equity, 12.1% in this quarter, giving annualized a 45% return on equity. Looking at the nine months, we see an increase in the premium as well. ISK 6.7 billion profit comparing to a ISK 15 million loss for the first nine month 2020. Combined ratio according to our plan and estimate, 97.7%. Return on investment, 16.2%, and return on equity, 36.6% over these nine months. The income statement shows the development which we see in premium and earnings. The premium increasing by 3.8%. Investment income increase as well over the period. Claims incurred decrease.
It's also worth mentioning the technical interest rates and exchange rate changes of technical provision, where we have a difference of ISK 962 million comparing to the last year due to the increase of interest rate in Iceland or in this period comparing to a decrease last year. Overall, a good result. A profit for the quarter, ISK 2.2 billion, and for the nine months, ISK 6.7 billion. We have here an overview of premium. Worth noticing that this continued business is more or less out of the premium, so it's very limited. We see the development of premium within the non-life part driven by motor majority, by motor being the traveling business coming back, car rentals, et cetera. Also, we see an increase in Ökuvísir, which gives the result there we see.
It's also worth noticing that the booked premium is increased by 6%, while the net premium for the period is increasing by 5% in the insurance part, leading to the fact that we see a stronger premium increase in the coming months and quarters. The business is driven by data. It's necessary to use the data to estimate the future. What we have been doing a lot for some years now, and we have been testing is finding out which customers have more probability of having fewer claims in the coming period. Of course, we can never be sure what will happen. Customers with no claim for many years can have claims tomorrow or the next day, but we can use the data to estimate the probability of a claim to incur based on the data we have in the company.
It's good to see that the work we have been doing within the company shows that the group of A customers, which we show in the bottom right pictures, which is the most profitable customer groups, has increased over two years by 8.5%. Of course, one of the main driver for getting the insurance business having more profit within our business. Of course, in line with our future vision of decreasing claims and working with our customer on our preventions program. Well, the development of claims. This is pictures showing that this quarter was relatively good. It has no big surprises, and the claims ratio is 68.6% and has not been lower for three years. The runoffs are in good shape and according to our plans. It's worth noticing the picture on the right, where we show how the change has been in digital claims handling.
We started the journey in 2018. Of course, COVID had a huge impact on that. It's becoming quite a large part of how customers report their claims to the company. We are still working on optimization on these processes, and we have been focusing on the processes on those who have the most frequent claims, like home contents claims, Kaskó, non-work accident, and travel claims. Of course, we have a lot of internal inspections on such a process. This is something that has given us a good result and comfort. We are focusing on doing more work in this area in the future. Well, looking at the operation, we see that the combined ratio is decreasing, which is in line with our estimate.
Of course, the last 18 or 20 months has been affected by work we have had on the claims reserves, which we have gone through thoroughly for some quarters now. We see that coming to an end, and we have this development of increasing of the combined ratio for the next quarter in according to our expectation. The operating expense for this quarter is low, but it's worth mentioning that this, in general, the third quarter is seasonal low based on how people take summer holidays and et cetera here in Iceland. This is according to our plan, and it's also worth mentioning what I said last time, that the salaries has been on the same krona level this year comparing to last year, which is in line with our expectation. Here we see the balance sheet. It's more or less seasonal changes.
We see that compared to the same period last year, we see the increase in claims provision, which we have stated earlier, and the premium reserves. Of course, the equity ratio has increased due to the earnings we have had for this season. It's also worth notice that the total equity and liabilities of ISK 60.7 billion. Investment part plays a huge role in an insurance company like ours, and the last quarters has the investment part had an effect on our bottom line, and I would like Arnór come and go over the investment part of this quarter.
Thanks, Helgi. As Helgi mentioned, the quarter was quite strong in investments. We had ISK 2 billion in investment income in the quarter. This is the fourth quarter in a row we reached above ISK 2 billion in investment income. The return was 4.5%, mostly driven by investments in equities, listed and unlisted. The changes in the allocation of the portfolio isn't that much. We see a little bit rise in unlisted equities, but fixed income parts are quite unchanged during the third quarter. All in all, a really strong quarter by 4.5% return compared to 2.9% last year. If you look at the first nine months of the year, see that we have ISK 7 billion in investment income. It gives up to 16.2% in return on investments, which is really strong. As I stated before, it mostly driven by listed and unlisted equities or other equities.
Listed equities returned ISK 4.4 billion during this period, which is 45% return, which is quite strong compared to returns in the market index and comparable funds. Unlisted equity part has been rising over the past two quarters, and we see 41% return on that asset class or ISK 1.5 billion. The fixed income part is returning roughly ISK 1 billion during the period, which is quite good to see in a rising interest rate environment. We're quite happy with just seeing positive numbers, for example, from government bonds and munis. The investment portfolio is ISK 46 billion, has never been larger and, as you can see on the right-hand part of the slide, is going up from ISK 35 to 46 billion over the past couple of years and has never been larger. Lastly, look at the portfolio, how we're positioned into fourth quarter.
The main changes we've been doing with the portfolio is increasing the inflation indexation of the portfolio, going from 42% to 48%. We can see that in the largest fixed income holdings, the two largest are inflation-indexed bonds. Our foreign part is 14%, 15% of the fixed income portfolio, and it's hedged against the ISK. Duration is roughly unchanged. It was 3.2 years at the end of second quarter and is 3.4 years now. Looking at the equity holdings, they are ISK 18 billion. We've been decreasing some of our assets in the listed space. New names in the list are Brim and Kaldalón, and the name that was at the end of second quarter, Marel, has dropped down from top 10.
We saw a large increase in value of our unlisted part as I mentioned before, mostly driven by Controlant, and you can see that the largest unlisted equity is our stake in Controlant, which earns up to ISK 1 billion, and we increased the value of that asset during the quarter. Other to mention, Hvatning, which is basically Blue Lagoon, the value of that asset was increased as well, and those two assets drove the performance of the unlisted part during the third quarter. Investment assets ISK 46 billion, never been larger, and with that, I will give it back to Helgi.
Thank you, Arnór. Well, looking at the solvency. Solvency ratio is 1.68, within the limit of 1.7, which we have stated as a limit for the company. It's worth mentioning again that there has been made decision in the board to set up a payback plan which takes this solvency ratio down to 1.6. Of course, this still need to be approved by the authorities, but this takes the solvency ratio down to 1.6. The own funds increase from the profit, and the changes in this SCR increased are made from the market risk. It's based on the increase in the investment part of the portfolio. We have set up on the payment. We see the payment since listing 2014, where has been paid out ISK 19 billion almost.
We have set out in 2021, we have added the proposed share buybacks of these 50 million shares, which leads to the fact that if that will be affected and then finalized in the end of the year, we will have this 50.4% for this year, 2021. Well, a little bit about our business and work within the company. We have set our focus on the sustainability part, not only as a guiding principle but also to work it and set it as a part of our DNA. We have decided to carbon offset the operation and working with Natural Capital Partners on that. It's very good to see how the development of those who are using Ökuvísir, how the development of driving behavior increase, which fits directly to the Sustainable Development Goal 3.6 of focusing on reducing car accidents.
We have put a lot of effort on the market campaign, Let Safety Fit. This also this important milestone we had in this quarter where we have eliminated the gender pay gap. A few words on that, because equality is a decision and it's not something that happens overnight, but it is due to a long work in this area within the company, where back to 2001, we had the first equality policy. Since then, we have been working a lot on this issue, it's good to see that in this quarter, we saw the gender pay gap on zero and a little under the line, which in our opinion, shows that we have eliminated this gap. Huge milestone we have received and worth mentioning.
On the business side, we have set an effort in this quarter on life and critical illness insurance, where we have automated the process on risk assessment. We have also made the critical illness part a better cover, and now it's possible to buy this insurance in a few minutes instead of many days and filling out many papers on the underwriting. A huge steps in this important area of our business. It's not only on the life and critical illness insurance we have taken these steps regarding Ökuvísir as mentioned earlier. We have taken the steps in the comprehensive insurance, Kaskó, where we simply believe that we have the best cover in Iceland, and also on the property insurance. A lot of work done in this area for the last few months.
At the end, I would like to state the unchanged outlook for the year, where we expected the combined ratio to be between 97% and 99%. At the same time, we say that the future objective for our company is that the combined ratio is under 95% and return on equity at least 15%. With that, I thank you for listening and hope you have a good day. Thank you.