PFA’s new strategy towards 2030: A larger and stronger customer community

PFA aims to increase customer funds to approximately DKK 1,100 billion by 2030 and, thanks to profitable growth, technology and economies of scale, reduce costs to make it more affordable and simpler to be a customer.

PFA is now launching a new strategy towards 2030. The ambition is to create a larger and stronger customer community where profitable growth, technology and continued focus on simple and efficient operations will lead to lower prices, better service and improved, more straightforward solutions that together create greater value for the 1.3 million individual customers and 7,000 corporate and organisational customers.

PFA currently manages approximately DKK 760 billion on behalf of its customers. The goal is to increase customer funds to around DKK 1,100 billion by the end of 2030, equivalent to an annual growth rate of approximately 8.5 per cent, thereby doubling the total customer funds since 2022. However, significant market losses in the financial markets could naturally challenge the feasibility of reaching this target during the period. 

“Our ambition is to strengthen our position as Denmark’s preferred and market-leading pension company, which through scale and efficient operations creates the most value and security for our customers and, thereby, for society,” says Ole Krogh, CEO of PFA. 

The strategy builds on the work of recent years, where a particular focus on simplification and improvement has significantly enhanced PFA’s competitiveness. Today, PFA is in a strong position with high growth in payments and customer funds, competitive investment returns, high customer satisfaction, a solid reputation and very high employee engagement. This provides an excellent foundation for the new strategy.

The core focus: financial security, health, senior living and social responsibility

PFA’s central focus areas remain financial security, health and a good senior life, which, together with our significant investment capacity, enable us to play an active role in addressing societal challenges. These areas are important to our customers and, therefore, also to PFA.

As a customer community, PFA allows profits to benefit customers, such as through profit sharing, price reductions and investments in better services and solutions.

“When we generate profit, we can share it with our customers, either through profit sharing, lower prices or investments in simpler and more value-creating solutions. Our ambition is that by 2030, it will be even more affordable, simpler and overall more attractive to be a customer with PFA,” says Ole Krogh.

Using technology, scale and employees to reduce costs

In the coming years, PFA will make significant investments in technology, artificial intelligence and new IT systems to reduce operational costs while improving quality. Moreover, where growth and customer needs demand it, investments in additional employees may also be necessary to ensure capacity and quality keep pace with developments.

The ambition is to digitise processes that do not require personal interaction, thereby creating more opportunities for PFA’s employees to dedicate more time to providing personal service in areas such as finance and health, where customers require direct contact.

“We need to work smarter and use technology to make it easier and more attractive to be our customer. At the same time, we will leverage scale and efficiency to reduce prices and create room for continued investments in new solutions,” says Ole Krogh.

A specific goal is to reduce customers’ average investment costs by 8 to 15 per cent over the strategy period.

Profitable growth and competitive returns

The new strategy is a balanced growth strategy, aiming to significantly increase total customer funds, lower prices and maintain a solid and profitable bottom line to benefit the customer community. The ambition is an average return on the capital base of 7 per cent per year, which reflects how much PFA needs to earn to provide a 10 per cent interest on the current Individual CustomerCapital of DKK 21 billion while also strengthening equity.

In monetary terms, this translates to an average annual profit of approximately DKK 2.4 billion. If PFA earns more or the Individual CustomerCapital is reduced, customer prices could be lowered even further during the period, or additional investments could be made to strengthen the business. The desire to reduce the Individual CustomerCapital stems from PFA’s current overcapitalisation, which would benefit the customer community.

Additionally, it is a key objective that PFA continues to deliver investment returns at the top of the commercial pension market, maintains high customer satisfaction and sustains very high employee engagement. These factors are essential for achieving the ambitions towards 2030.

“When we aim for profitable growth, it is because we believe that the larger we become, the better we can leverage our scale to produce more affordable and better solutions for both new and existing customers. This benefits our customer community, which thereby becomes larger and stronger,” says Ole Krogh.

A flexible strategy in a changing world

The strategy extends to 2030, but in a rapidly changing world, there must be room for adjustments if regulatory conditions, markets or societal circumstances change significantly. PFA’s strength lies in its ability to respond quickly and adjust its course while still aiming for the 2030 ambitions.

“The world is changing rapidly. We have seen this in recent years, both geopolitically, economically, in terms of security and regarding the green transition. Predictability has decreased, and therefore, our strategy represents direction and ambition for 2030 rather than a rigid plan. If conditions change, we must be ready to adjust our course while still aiming for the long-term ambitions, so we can continue to create the most value and security for our customers,” says Ole Krogh.