DENMARK – Danica Pension boosted its profits at the end of the third quarter by 49% from the half-year stage, but contributions were down compared with the year before.
The Danske Bank subsidiary reported pre-tax profit of DKK1.4bn (€185m) in the year to the end of September, up from the DKK930m posted at the end of June.
In the year to September 2011, the company made a DKK281m loss.
Per Klitgård, managing director at Danica Pension, said: "A good investment result, the inclusion in our revenue of the risk allowance, as well as our effective administration are the main factors behind the solid results."
He said the result was particularly good given that the company had managed to cut prices for its Danica Balance product by as much as DKK200m a year.
The investment return on the traditional with-profits product was 7.3% in the year to September, up from 4.5% in the same period last year.
Unit-link pension products Danica Balance and Danica Link produced an average return of 9.9% in the year to September.
In the same period last year, the products posted an average loss of 7.4%.
But business volumes shrank slightly, with pension contributions falling to DKK18.4bn at the end of September from DKK20bn in the same period in 2011.
Within Denmark, contributions were DKK13.4bn compared with DKK14.0bn.
Klitgård said: "Our contributions are marginally lower, down 4% compared with the record year 2011, when we had an influx of large corporate schemes."
In foreign markets, contributions in Norway grew by 41% while those in Sweden fell by 26%.
The cost ratio in Denmark fell to 4.4% at the end of the third quarter from 4.9% in the same period last year.
In other news, pensions administrator PKA said it made an investment return of DKK16.1bn in the first three quarters of the year, or 10.6%.
The company said: "All asset classes contributed positively to the result, but the profit was particularly affected by equities, corporate bonds and European government bonds."
It said it had continued with its strategy of hedging against further declines in interest rates.
Investment director Michael Nellemann Pedersen said: "In spite of the unstable markets in Southern Europe, and generally turbulent financial markets, PKA has continued to increase profits quarter after quarter.
"It is very satisfying to see how PKA's long-sighted strategy of spreading risk is bearing fruit."
The pensions administrator said it was increasingly relying on investments that were less sensitive to swings on the financial markets, such as infrastructure and property.
PKA has approved infrastructure investment of around DKK6bn, Nelleman Pedersen said.
PKA administers five Danish pension funds in the social and healthcare sectors, and manages around DKK200bn in assets.