Danica Pension reported that its investments in the green transition ballooned to DKK27bn (€3.5bn) by the end of last year – up from the DKK20bn it reported at the beginning of October, and almost three times the DKK10bn volume of such assets it had at the end of 2019.

According to annual results released yesterday, the Danske Bank pensions subsidiary also revealed that business volumes increased in 2020, with Danish contributions rising by just over 3% in the year.

Ole Krogh Petersen, Danica Pension’s chief executive officer, said: “It is key to us that our investment in the green transition goes hand in hand with attractive returns for our customers, and we are confident that this is the case, as there is strong demand for green solutions in Denmark and the rest of the world, on top of which the corona crisis has brought about a heightened focus on sustainability and a green restart of our society.”

The DKK465bn pension provider said the latest figure meant it was well underway to meeting the target set in autumn 2019 to invest DKK30bn in the green transition by 2023, DKK50bn by 2025 and DKK100bn by 2030.

Danica Pension also reported a return for customers from traditional average-rate pensions of 3.1%, with this figure having been almost halved by the need for more provisions.

In line with figures for unit-link investment returns published in early January, Danica said in yesterday’s report that customers with its Danica Balance Mix product, a medium risk profile and 20 years to retirement saw a return of 9.5% in 2020, net of expenses.

The firm reported a pre-tax profit of DKK1.8bn for 2020, compared to a 2019 figure of DKK1bn.

It attributed this sharp improvement throughout the turbulent year to the strong performance of its investment portfolio, but also to a reduced deficit on its health and accident business due to a lower number of claims.

“The loss on our health and accident business remains unsatisfactory, but we are now on the right track, as we are starting to see the effects of the initiatives we launched over the past couple of years,” said Krogh Petersen.

While the Danish business ended the year with a 3.1% rise in premiums to DKK27.9bn in 2020 from DKK27bn in 2019, Danica Pension reported that overall, it had seen a 2.1% growth in premium income to DKK30.3bn in 2020 from DKK30bn in 2019.

Danica said premiums at its Norwegian arm had ended the year down in Danish krone terms, because of the lower exchange rate from Norwegian kroner, but added: “Measured in local currency, premiums in the Norwegian business also grew, however.”

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