Denmark’s Danica Pension has reported strong returns for customers in the first half of 2024.

Customers with its flagship offering Danica Balance received a total return of DKK 20.1bn in H1. Danica Pension's customers with medium risk and 20 years to retirement earned a return of 9.4 per cent in the first half. Over the past five years, this type of customer has seen a return of 43.5 per cent after expenses.

In addition, the pension provider’s profit for H1 was DKK 949m (before tax), compared with DKK 689m for the same period last year. However, its health and accident (SUL) business suffered a lost in H1 of DKK 341m, compared to DKK 321m for the same period last year.

Commenting, Danica Pension CEO, Mads Kaagaard, said: "I am very pleased that we have delivered a high return to our customers, which helps provide extra security in their everyday lives. At the same time, we are making a satisfactory profit, which is evidence of a healthy and growing business."

In 2024, equity markets in particular have contributed to the high returns, and Danica Pension's portfolio has benefited from a reasonable exposure to the main sectors. In the longer term, Danica Pension's returns have also benefited from a broad exposure to alternative investments.

"In the first half of the year, we ranked at the top of returns for commercial companies, and our investment strategy has proven to be highly beneficial for our customers over time. At the same time, we have been able to lower our investment costs, which makes our customers even better off in the future," Kaagaard added.

Furthermore, payments grew by 8 per cent from DKK 20,052m to DKK 21,570m, driven by a net addition of 1,284 new corporate and self-employed customers.

"We have a strong market position, supported by top-of-market returns, broad healthcare solutions and customer-friendly digital solutions. So I am very pleased that we can show growth and that our current customers express satisfaction with our overall efforts," Kaagaard said.

Overall, Danica Pension’s solvency ratio increased to 217 per cent in the first half of the year from 170 per cent at the end of 2023, indicating a very strong foundation for the business. The main reason for the increase in the solvency ratio is due to a changed method for how the loss-absorbing effect of deferred taxes can be recognised in the solvency capital requirement, calculated in accordance with Solvency II rules.

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