Danica Pension has reported a loss of DKK 202m in the first half of 2022.

Publishing its interim results, Danica Pension said the war in Ukraine, as well as sharply rising inflation and interest rates, have to led negative markets, which has resulted in a negative effect on the result before tax.

The pension provider said the DKK 202m loss includes the gain from the sale of the Norwegian business of DKK 415m against a positive profit before tax of DKK 971m for the same period last year.

It said the decline in profit before tax is solely due to a marked negative investment result as a result of the downturn in the financial markets worldwide. However, it said the underlying business in Danica Pension is doing well, with the insurance arm of the sickness and accident business improving and there is continued growth in payments.

In the first half of 2022, Danica Pension achieved a growth in payments in Denmark of 5.9 per cent compared to the same period last year, and this is after growth in payments of 32 per cent in 2021.

Commenting, Danica Pension director, Søren Lockwood, said: “Our underlying operations are still very good, and we are continuing our profitable growth… The first half of the year for Danica Pension – like the rest of society – has also been marked by the unfortunate war in Ukraine. This, together with rising inflation and rapidly rising interest rates, has led to negative investment results for Danish pension savers and thus also our customers. The declining financial markets are also the reason why our profit before tax has fallen and been negative.”

Customers in Danica Pension with medium risk and 20 years to retirement received a return of -14.3 per cent in the first six months of the year. However, the same type of customer has over the past three calendar years received a return of 54.2 per cent after costs.

"We advise our customers to have ice in their stomachs, and we are sticking to the investment strategy that has given customers the market's best return on costs in the last three calendar years," Lockwood said.

“It has been a very turbulent half-year, which we have rarely seen in the financial markets. All asset classes have been hit by negative returns, and this has also meant that Danica's customers at market interest rates have received negative returns. It is worth remembering that investing in pensions is long-term, and although it is of course a real pity that pension customers have received negative returns in the first six months of the year, it is important to remember that it comes after three years where the same customers has received very high returns after costs.”

Share Story: