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Nordic roundup: PFA Pension, AMF, Danica Pension

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Denmark’s largest commercial pensions provider PFA Pension has said a rise of around 14% in Danish share prices in the first three months of the year drove unit-link product returns higher.

Reporting initial figures for first-quarter investment performance, PFA Pension said its unit-link PFA Plus product produced returns of 2.8% after costs and including the shared customer capital (KundeKapital) bonus.

This compares with a 3.7% return reported for the first quarter in 2013.

Jesper Langmack, director at PFA Asset Management, said: “The main reason PFA has done well this year is that it has a large exposure to Danish shares relative to competitors.”

PFA’s Danish shares increased by about 14% in the first quarter.

Around 17% of PFA’s investments for unit-link products with high-risk profiles are held in Danish equities, with the company’s total Danish equity investments standing at more than DKK12bn (€1.6bn).

Investments in corporate bonds also performed well in the first quarter, providing a return of 3.4%, which benefitted customers opting for lower-risk profiles, Langmack said.

However, he said that when the market was volatile, as it had been in the run-up to Easter, it was important to look at it closely in order to act fast and take advantage of opportunities.

“What was the right strategy in the first quarter is not necessarily the right one for the rest of the year,” he said.

Meanwhile, Sweden’s occupational pensions provider AMF reported investments returned 2.2% in the first quarter of this year, down from 3.3% in the same period last year. 

The solvency ratio increased to 212 by the end of the March from 200 the same time last year.

Peder Hasslev, head of asset management, said: “The start of the year was characterised by a degree of caution about where the global economy was heading.”

He also cited a continuing expectation that the economy would improve given that geopolitical events had not put a spoke in the wheel.

Group profit fell to SEK4.7bn (€520m) by the end of March, down from SEK19.8bn at the same point last year. 

The company said SEK7.2bn of this decline was due to changes made to the discount rate used to calculate liabilities.

Premium income fell to SEK9.6bn from SEK10.2bn, and total assets rose to SEK466bn from SEK426bn.

AMF is jointly owned by the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise.

In other news, Danica Pension said reported contributions from domestic customers rose by 11% in the first three months of this year to DKK5.6bn, with business growth helped by sales through the Danske Bank network.

The company, which is a subsidiary of Danske Bank, made a pre-tax profit of DKK454m in the first quarter, up from DKK385m in the same period a year before.

Managing director Per Klitgård said he was satisfied with the result, and noted in particular that the technical profit had risen to DKK419bn from DKK384m

“This emphasises strong development in our business,” he said.

Klitgård said the rise in contributions in Denmark was due to a significant level of one-off contributions, as well as a general increase in business.

He said Danica Pension’s cooperation with Danske Bank continued to go very well, with contributions through this channel rising by 50% between the first quarter of last year and the latest reporting period.

Contributions overall climbed 3% to DKK7.8bn in the first quarter from DKK7.7bn in the same period last year.

However, within this, contributions in Sweden and Norway fell by 14%, Danica said, but it attributed this decline to very large one-off contributions booked in the first quarter of 2013.

“Danica Pension still expects contributions in the Nordic business to develop positively in 2014,” the company said.

Danica’s unit-link pension products made returns of 1.5% to 2.6% in the first quarter, while the traditional with-profits pension product returned 3%.

Total assets rose to DKK333bn from DKK327bn.

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