PFA, Denmark’s largest commercial pensions provider, reported a return to profit in the first half of this year on the back of stronger investment markets, and announced progress in reducing losses on a type of insurance often bundled with pension contracts.
The Copenhagen-based firm said pre-tax profit rose to DKK347bn (€46.5bn) for the first half of the year, compared to the DKK910bn loss of the same period in 2022.
The first-half profit also exceeds the DKK200bn profit PFA made for the whole of 2022.
Ole Krogh Petersen, PFA’s chief executive officers, said: “Our customers and PFA came rather well out of the first half year.”
After a difficult 2022, he said, it was positive “that we can deliver solid and positive returns at the top of the commercial pension market”.
At the beginning of July, PFA’s group chief investment officer Kasper Ahrndt Lorenzen revealed the provider had produced returns of up to 9% for its pension customers, with a boost in exposure to US equities having been a factor behind the gains.
According to its interim report published today, PFA’s total assets climbed to DKK763bn by the end of June from DKK721bn at the end of 2022.
The new set of financial figures from PFA also show the impact of a changed regulatory environment for Danish insurance and pension providers.
In late 2021, the Danish Financial Supervisory Authority (FSA) implemented new rules requiring the firms to account for their health and accident insurance businesses separately from their pensions activities. This was aimed at stopping pension firms making long-term losses on insurance products.
The FSA acted in response to competition concerns that bundled insurance-and-pension bids were being used unfairly to win company pension contracts.
Among the figures released, PFA’s result from life insurance was shown to have diminished to DKK182bn in the six months to June, from DKK329bn in the same period a year earlier, while conversely the group’s profit on health and accidence insurance rose to DKK157bn from a loss of DKK356bn a year earlier.
PFA said that in connection with the new Danish executive order on health and accident insurance, since 1 January 2022 it had been writing occupational capacity insurance and other cover under life insurance instead of under health and accident insurance.
“If you look at the continuous operating results of this type of insurance, it basically lands at minus DKK570m, which is an improvement of DKK340m compared to the same period last year,” the company said.
“In this way, PFA is following the restoration plan on health and accident insurance with a view to being in balance during 2025,” it said.
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