PFA delivers growth and solid return of 18 billion in the first 9 months of 2017

The results for Q1-Q3 reflect a strong PFA delivering on the group's Strategy2020. PFA generated a solid return of DKK 18.3 billion in the first nine months of the year, securing market rate customers a return of up to 9 per cent. At the same time, PFA continues to grow. Regular payments increased by 12 per cent, and total payments amounted to DKK 25 billion.

The operating profit came to DKK 1.3 billion, of which DKK 1.1 billion was distributed to customers through CustomerCapital, which is PFA's model for sharing profit and risk with its customers.

“PFA must ensure that our 1.2 million individual customers have as much as possible to live off when they stop working. I am therefore pleased that we are able to return DKK 1.1 billion of our operating profit of DKK 1.3 billion to them. Adding an overall return of more than DKK 18 billion and a return to market rate customers of up to 9 per cent, it becomes clear that 2017 has so far been a good year for PFA and its customers,” says Allan Polack, CEO of PFA.

Market leader in growth

PFA is the market-leading corporate pension provider in Denmark, and the financial statements for Q1-Q3 show steadily increasing payments. In Q1-Q3 2017, regular pension payments were up 12 per cent, while total payments rose to DKK 25 billion from DKK 23 billion. During the same period, PFA welcomed 189 new corporate customers and lost 59.

“We are seeing considerable growth in regular payments and we attract many new corporate customers, which is impressive in a mature market. The growth in pension payments is 12 per cent, and it is particularly satisfactory that payments exceed payouts. Net payments amounted to DKK 9.6 billion, which equates to 38 per cent of payments being translated into growth,” says Allan Polack.

Impressive returns for customers

PFA has generated a total return to its customers of DKK 18.3 billion since the beginning of the year, and market rate customers have received returns of up to 9.0 per cent.

“We have generated impressive returns for our customers in the first nine months of the year. I believe that figures like DKK 18 billion and up to 9 per cent speak for themselves. The impressive returns are due, in particular, to favourable equity markets in both Europe and emerging markets, where we have increased our investments,” says Allan Polack.

PFA's ambition is to be at the very top when it comes to long-term returns. According to the most recent study carried out by the independent research institute Morningstar, for the past two, three, four and five years, PFA has ranked among the best in the industry when it comes to its ability to generate returns based on the risk taken.

New expected longevity affects provisions

In future, an increase in longevity is expected, leading PFA to increase its provisions for life insurance payouts. As from 30 September, PFA's life insurance provisions are based on a 20-year longevity benchmark instead of the previous 30-year benchmark.

This reduces the collective bonus potential by DKK 2.2 billion. The increase also affected results for Q1-Q3 2017 as the full operational risk charge from the average interest portfolio cannot be recognised as income.

“People in Denmark live longer, which is positive. But when longevity in Denmark increases markedly, we must take due account of this in our financial statements,” Allan Polack explains.

Results for Q1-Q3 2017 from sickness and accident insurance operations amounted to DKK -306 million against DKK -612 million in the same period last year, corresponding to an improvement of DKK 306 million.