First-half contributions surge at Denmark's Danica Pension
DENMARK - Contributions at Denmark's Danica Pension rose sharply in the first half of this year, as the big commercial provider gained several new corporate clients, but stock market turmoil meant that market-link products ended the period with a narrow investment loss.
At group level, contributions climbed 17% in the January to June period, to DKK14.2bn (€1.9bn), the pension provider reported.
Of that total, contributions in the Danish corporate market were up 27%.
Jørgen Klejnstrup, managing director of the Danske Bank subsidiary, said: "In the course of the last six months, we have gained a great many new business customers, and that is the background to the large rise in contributions on the Danish market of 14%.
"We are very pleased with that given the Danish pensions market is close to saturation, so growth will happen through companies changing their pension provider."
It was the market-link product Danica Balance that was driving contributions higher, he said, adding that in Denmark, market-link products now made up two-thirds of total contributions.
However, in the first half, Danica Balance and Danica Link - another market link product - suffered an average 1% investment loss by the half-year stage.
In the full year 2010, the products made returns of 12% ad 14.1%, respectively.
"The negative result is primarily due to the big fall in share prices in the month of June as a result of the crisis in Greece," Klejnstrup said, adding that it was a difficult market at the moment.
Danica's traditional with-profits products produced a profit of 1.1% in the first six months of this year. But when adjusted to take account of so-called supplementary hedging, the company said profit for the product was 2.2%, against 1.9% in the year-earlier period.
At group level, Danica's pre-tax profit fell in the first half to DKK400m from DKK800m in the same period a year before, a result the company described as satisfactory - but affected by a lower investment return.
Assets under management climbed slightly to DKK294bn from DKK287bn.