Denmark’s Danica Pension reported investment losses on its market-rate pensions in the first half, with customers with medium-risk profiles taking a 4.3% hit to their pension pots – but the provider’s chief executive officer described the negative returns as satisfactory given first quarter asset value lows.
Total assets of the Danske Bank subsidiary fell to DKK429bn (€57.6bn) by the end of June from DKK435bn the same time last year, while its pretax profit for the first half rose to DKK892m from DKK766m – a 16.5% improvement the firm said was mainly due to a reduced deficit on the health and accident business.
Ole Krogh Petersen, Danica Pension CEO, said: “Considering how turbulent and unusual the first half was, I am pleased with the results we produced for our customers and for Danica Pension.”
In the interim report published today, the pension fund said the 4.3% loss on its Danica Balance Mix product, for someone with 20 years to retirement and a medium-risk profile, was “satisfactory,” in light of the fact the loss for such a individual had stood at 15% at the end of March.
Krogh Petersen said it was naturally frustrating that Danica’s customers had negative returns, but that the firm was pleased to have recovered a large part of the loss by maintaining its investment strategy.
“In 2020, it has been particularly important to keep in mind that pensions are a long game, and I am happy to note that we have consistently been guided by this principle,” he said.
After a charge for additional provisions, the return for the traditional average-rate pension scheme was -1% in the first half, down from 1.6% in the same period last year, according to the interim data.
Green investments nearly doubled in the first six months of 2020 to DKK19.6bn, Danica said, from DKK10.3bn at the end of 2019.
“This means that we are well underway to meeting our target of investing DKK30bn in the green transition by 2023, DKK50bn by 2025 and DKK100bn by 2030,” the firm said.