Danish commercial mutual pensions giant PFA has outlined its new three-year business strategy after reporting a “historically high return” of DKK57.6bn (€7.7bn) for 2019 – a year that was nevertheless marred by heavy losses on its health and accident insurance.

The new plan — dubbed “Commercial Responsibility 2023” — sets out the labour-market pension provider’s strategy to stay in Denmark’s wealthy pension sector, both in terms of steady return generation and in sustainability and responsible investment.

Allan Polack, PFA chief executive officer, said: “To hold onto the leading position among pension companies, a strong commercial focus has to go hand in hand with responsibility.

“We want to generate profitable growth and live up to our goal of ensuring the good life for our customers in the future,” he added.

The pension fund – whose total customer assets grew to DKK560bn by the end of December – described last year’s return on savings as a “historically high return for PFA in a year when the financial markets experienced handsome increases across all asset classes.”

The DKK57.6bn return compares to a restated 2018 loss of DKK5.3bn suffered by the firm.

Allan Polack at PFA

“We want to generate profitable growth and live up to our goal of ensuring the good life for our customers in the future”

Allan Polack, PFA CEO

In spite of this return, health and accident insurance lost DKK2.27bn for PFA in 2019, adding to 2018’s restated loss of DKK1.13bn.

Polack said that because of this unsatisfactory result, the company had started a major restructuring of its insurance operations and ramped up resources in this area.

PFA said the new 2023 strategy is based on its idea that commercial value creation and responsibility are mutually dependent, and consists of three primary objectives:

  • to be the best at generating sustainable returns;
  • earn the highest customer loyalty in the market;
  • and have a solid foundation and generate profitable growth.

Market-rate returns for PFA’s pension customers ranged from 6.4% and 19% before tax in 2019 depending on the individual profile, compared with between -5.7% and 0.3% in 2018.

Average interest rate plans returned 2.6%, up from 1.4% in the previous year.

The comparative 2018 figures provided by PFA in its 2019 financial report were changed from those originally reported due to an earlier reporting error.