DENMARK - Danica Pension has reported a "satisfactory" return of 5.8% on its traditional pension plan in the first three quarters of the year.

Quarterly figures from Danske Bank, the pension fund's parent company, showed Danica Pension produced an investment return of DKK 1.19bn (€159.2m) across its three products - Danica Traditionel, Danica Balance and Danica Link.

The total value of the pension fund assets increased to DKK 265.4bn over the nine months compared to DKK 242.1bn in the same period in 2008.

Danica Traditionel, which provides policyholders with a set rate of interest for their savings, produced a return of 5.8% gross, which reduced slightly to 5.4% after including changes in technical provisions. This is because the positive result helped boost the financial reserves allowing Danica to discontinue charges on transfers and surrenders and increase interest rates on Danica Traditionel from 1.5% to 2.25%. (See earlier IPE article: Recovery allows Danica to improve pension terms)

In addition, Danica Balance and Danica Link - which allow customers to select their own investment profiles  - reported a return of DKK 4.76bn, or an average rate of return of 19.8% for both plans.

However, total pension premiums fell by 12% to DKK 14.3bn in the period as a result of a decline in single premiums. Regular premiums in the Danish business increased 14%.

The report also highlighted a positive performance for the Swedish arm of the pension fund where premiums increased by 8% to DKK1.99bn compared to 2008, or 22% in Swedish kronor terms. But the Norwegian business produced a more disappointing result as premiums dropped 17% to DKK 413m.

Danica also noted that the collective bonus potential of the scheme increased by DKK1.9bn to DKK3.5bn between January and September, which made it "possible to restore DKK 2.8bn drawn from the bonus potential of paid up policies at the beginning of the year". (See earlier IPE article: Danica Pension posts Q1 profit)

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