A DKK 75 million (EUR 10 million) loss for health and accident insurance is not something that Allan Polack, chief executive of Danish pension fund group PFA feels like celebrating. Not even in the light of a significant improvement compared to last year, when PFA lost DKK 350 million in that department.
"We think that this long, hard haul on health and accident insurance is going well. But we are still not happy that the numbers are red. It's a hard slog," he tells AMWatch.
Most commercial pension funds every year realize at million losses in health and accident insurance, a field where prices have been competed down to about 60 percent of what would be sufficient to cover the costs.
No promises of black numbers
Allan Polack will not promise that 207 brings a quarter with positive numbers on the bottom line of PFA's health and accident insurance accounts.
"I'm not saying that. It's not a promise that I can make. Besides, you can't work with short periods of time. This is very sensitive over short periods of time," he says.
He explains that many different chance events factor in over a period of three months – customers could recover faster than expected, other customers might have a higher sickness rate, and new contracts could come along which requires PFA to allocate money for future sickness.
"So a longer perspective is needed if we want a proper picture."
You're not celebrating this quarter's results in health and accident insurance?
"No, we're settling for a nod of approval that it's going in the right direction," Polack says.
Sucked knowledge out of divestment
The divestment of Mølholm Forsikring, which is the Danish market leader in health insurance, to Gjensidige Insurance, was carried into effect on May 1.
PFA otherwise focuses on preventive measures in order to reduce the health and accident insurance deficit, and it seemed like the pension fund could find the needed competencies at Mølholm Forsinkring.
But PFA has brought in the know-how it needed from Mølholm,Allan Polack explains.
"We have had Mølholm for a few years now and learned a lot from the company. But having two units that do the same thing doesn't make sense. So we made the decision to sell it off. We could also have merged it into PFA, but we thought it would be best to divest it," he says.
English Edit: Marie Honoré