PFA reports an excellent first half-year 2015

During the first half-year of 2015, the pension company PFA gathered momentum which means handsome returns to the customers, increased solvency and a huge upsurge in new payments.

The first six months meant a return at a total value of DKK 7.5 billion to PFA’s customers, and in spite of the period being characterised by a high volatility on the capital markets, PFA’s customers experienced excellent returns. Market rate customers received returns between 3.4 per cent and 12.8 per cent depending on the risk profile and investment horizon selected by the individual customer. PFA’s largest customer group – Profile C – received a return of 10.2 per cent.

Average interest rate customers received an average return of 0.3 per cent and will get a deposit interest rate of 2 per cent. In addition, the customers’ collective reserves, the collective bonus potential, increased by DKK 3.7 billion.

Shares and alternative investments
“It is gratifying that we are able to maintain recent years’ handsome returns. This half-year, the returns have especially been driven by shares, alternative investments and a strengthened US dollar. In spite of the severe Greek turbulence, the uncertain Chinese growth and the extremely low interest rates, PFA has had a reasonable exposure to those parts of the share market that turned out to be robust,” Allan Polack, Group CEO, says.

He explains that the negative development on the share market since 30 June has affected the return for the market rate customers after the balancing of the interim accounts.

“However, the market rate customers still have positive 2015 returns so far. And I have positive expectations when it comes to the return for 2015 as a whole,” Allan Polack adds.

The pre-tax profit for the first six months of 2015 came at DKK 223 million. The half-year result of PFA’s pension operations amounted to DKK 865 million before tax, whereas PFA’s sickness and accident insurance plans (SUL) resulted in a loss of DKK 344 million.

“It is far from satisfactory that the SUL result has led to deductions from the earnings in other business areas. However, it remains undeniable that the claims experience has been high, and we have therefore taken steps to improve this area,” Allan Polack says.

Increased capital adequacy
He is also very pleased that during the recent six months, PFA has increased its capital adequacy (Solvency I) from 278 per cent at the turn of the year to 297 per cent today. PFA now has the highest capital adequacy seen in a 5-year perspective.

“PFA is an extremely well-capitalised and robust company. At a time when the capital requirements in the financial sector become increasingly stricter, it is very positive that PFA is in a situation where we are able to take advantage of our position as a long-term investor without being unduly hampered by the present and future solvency requirements,” Allan Polack says.

PFA welcomes new customers
Total payments to PFA grew throughout the first six months of 2015 by as much as 20 per cent to DKK 14.7 billion compared to DKK 12.2 billion in the first half-year of 2014.

“We are very pleased to welcome new customers to PFA. Pension operations profit from economies of scale, which means that the influx of new customers who fit into the PFA template will benefit both new and present customers,” Allan Polack concludes.