DENMARK - Danica Pension, the pensions arm of Danske Bank, saw a negative return on its investments in the first quarter of -1.3%, and the business made a pre-tax loss of DKK420m (€56.2m) largely as a result of this.

However, Danica's investment return narrowly beat that of rival Nordea Life & Pensions, where investments returned -1.5% in the three-month period.

Danica's investment return compares with a 0.2% return achieved in the first quarter of 2007, and the pre-tax loss comes after a profit of DKK418m in the year-earlier period.

Pension contributions, however, rose a strong 17% to DKK5.6bn in the period, it said.

"The combination of some of the market's best and most modern products, good advice and returns at competitive prices led more and more to choose Danica Pension as their preferred pensions provider," said managing director Henrik Ramlau-Hansen.

Business in Sweden was particularly string, according to Ramlau-Hansen. "We can confirm growth in contributions of no less than 102. But in the Danish market growth in pension contributions was also solid at 11%."

Danica said costs for the group had fallen to 6.4% in the first quarter from 6.9% the same time a year ago, adding the company had focused heavily on this aspect of its business.

"We are the first pensions company to show all costs with the launch of ‘OmkostningsTjek' (Costs Check) - both direct and indirect costs," said Ramlau-Hansen, referring to a new online tool which allows pension customers to get a breakdown of how much they are being charged.

"We hope that in the future the competition will be based on who has the best and cheapest products, and not on who is best at hiding costs from customers," he said.

Nordea's Life & Pensions division also reported strong business growth in Sweden as total premiums in the division rose 6% compared with Q1 2007.

"The successful relaunch of capital insurance product Placera in Sweden contributed to a rise of 69% in premium income in Sweden," said Nordea, in its interim report.

Premium income in Poland also made a marked contribution to the result, it added.

"Life & Pensions' investment return and buffers were hit by the volatile financial markets and higher credit margins in the first quarter," it said. The negative investment return of 1.5% compares with a positive 1.0% in the first quarter of 2007.

The result for the Life & Pensions division was €55mn, down 5% from the year-earlier period, it said, while assets under management fell to DKK33.01bn from DKK33.89bn at the end of 2007.