DENMARK - Profits at Danish pension provider Danica showed strong growth at the half-year stage, with business boosted by revenue from Norway and Sweden rather than the domestic market.
Administration expense had been trimmed allowing the cost of some products to fall, the company said in its interim statement.
Pre-tax profit rose to DKK824m (€110.6m) for Danica Pension at the group level in the first half 2010, up from DKK718m in the corresponding period last year. Pension premiums were up 25% to DKK12.2bn, the company reported.
"The growth from subsidiaries inSweden and Norway is striking, but it is also satisfactory that that premiums have risen by 2% in Denmark - not least at a time marked by uncertainty both about pensions taxation and low economic growth," it stated.
Danica Pension, which is a subsidiary of Danske Bank, said it had strengthened its position particularly in the corporate market, and that it expected to be able to further develop during the rest of the year.
Contributions to the market-linked pension products, Danica Balance and Danica Link had risen by 48% to DKK4.7bn. Consequently, they overtook contributions to the older Danica Traditionel product for the first time. Danica predicted this trend would continue.
Administration costs fell in the last year to 5.6% in the first half from 6.2% in the same period in 2009, it said.
"By making our business more efficient, Danica's administration costs are now at the lowest level ever," said managing director Henrik Ramlau-Hansen.
He added that Danica planned to lower prices on a range of savings and insurance products, amounting to more than DKK100m a year.
"At the same time, we are giving our corporate customers an extra bonus of DKK150mn because of the positive development of their risk coverage," Ramlau-Hansen said.
The Danica MD conceded that competition in the sector was tougher than ever, but said economies of scale, low prices and efficient service, combined with openness and a high level of capital would continue to make Danica Pension "a safe choice for customers".