Solid returns and record-high turnover in 2016
In 2016, PFA delivered solid returns to the customers of up to 8.2 per cent. At the same time, payments broke the record. Total payments resulted in DKK 31.8 billion, which is a 10.7 per cent increase. To this comes 22.9 billion from the merger with Bankpension. This way, total payments to PFA in 2016 amount to DKK 54.7 billion.
PFA exits 2016 with a strong operating result amounting to DKK 1.5 billion. Of this amount, DKK 1.3 billion goes to CustomerCapital, which allows PFA to share its profit with the customers. PFA is able to do so, as, already from PFA’s foundation in 1917, the owners renounced their share of the company’s financial returns.
Allan Polack, Group CEO in PFA Pension, says:
- We are very pleased with the 2016 results. We step into 2017, where we celebrate our 100-year anniversary with a record-high turnover of DKK 31.8 billion, an influx of customer funds from the merger with Bankpension of DKK 22.9 billion and an operating profit of DKK 1.5 billion. And when adding that we once again have generated solid returns of up to 8.2 per cent, I can conclude that 2016 was an excellent year for PFA and our customers.
PFA delivers on the strategic targets of Strategy2020 in 2016
By the end of 2016, PFA administered customer funds in the amount of DKK 439 billion and investment funds in the amount of DKK 605 billion.
Net growth in total customer funds amounted to DKK 57.4 billion, which corresponds to 15 per cent. The increase is a result of growth in net payments, transfer of funds from Bankpension and return on investments.
At the same time, expenses per insured in 2016 were reduced by 3.4 per cent to DKK 739.
Allan Polack says:
- 2016 was the first year of execution of Strategy2020, and it is highly satisfying that we meet the sub-targets that we have set up. In 2016, PFA has undergone a positive development. We have experienced a significant growth in payments, we have acquired 374 new corporate customers, our return is solid and well-funded, and our expenses per insured have decreased. This is very satisfactory.
Improved results within sickness and accident
The sickness and accident insurance operations in 2016 resulted in a loss of DKK 481 million against a loss of DKK 644 million in 2015. This is an improvement of DKK 163 million.
To this, Allan Polack states:
- We are very pleased that the negative trend on sickness and accident insurance operations has turned around. This is a core business area for us, and we have further developed our strategy in 2016. In the future, PFA will increasingly see preventive measures, treatment and insurance products as a whole, and we will continue improving our products and services for the benefit of both the company, the employee and PFA.
Solid returns to the customers
Over a five-year period, PFA wants to be number one in creating returns. In 2016, the company navigated safely through a turbulent year for investments, and therefore, the year resulted in a solid investment return in the amount of DKK 26.5 billion.
Anders Damgaard, CFO in PFA Pension, says:
- Depending on the investment profile and years to retirement, the customers with market rate pension plans have received a return between 6.5 per cent and 8.2 when including CustomerCapital. This is a good return, particularly in the light of the inflation in Denmark, which is down to 0.3 per cent per year. Also, it is satisfying that PFA lives up to its targets about being at the top of the list of returns over a five-year period.
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- Customers with a market rate plans received a return between 6.5 and 8.2 per cent including return on CustomerCapital depending on their risk profile. The total return on average interest rate products amounted to 6.6 per cent. The investment return amounts to DKK 26.5 billion.
- Total payments amounted to DKK 31.8 billion, which is a 10.7 per cent increase from 2015.
- To this comes 22.9 billion from the merger with Bankpension. This way, total payments to PFA in 2016 amount to DKK 54.7 billion.
- Regular payments amount to DKK 19.2 billion.
- The sickness and accident insurance operations resulted in a loss of DKK 481 million against a loss of DKK 644 million in 2015.
- The total pre-tax insurance result amounts to DKK 1,480 million.
- CustomerCapital’s share of the result amounts to DKK 1,291 million.
- Expenses per insured are DKK 739 against DKK 765 in 2015.
- Total customer funds amount to DKK 439 billion by the end of 2016 and are determined as provisions for insurance and investment contracts plus CustomerCapital.
- Net growth in total customer funds amounted to DKK 57.4 billion, which corresponds to 15 per cent. The increase is a result of growth in net payments, transfer from Bankpension and return on investments.