Norwegian pension funds lost an average of 4% in Q1 – Finanstilsynet

Pension funds in Norway posted a pre-tax profit of -4 per cent (annualised) on average in the first quarter (Q1) of 2020, according to the Financial Supervisory Authority of Norway (Finanstilsynet).

Publishing an update on the performance of financial companies in Q1, Finanstilsynet said profitability was “significantly weakened” as a result of the coronavirus crisis.

“Great turmoil in the financial markets and a sudden and sharp fall in economic activity led to increased losses in banks and lower returns in insurance companies and pension funds. In the first quarter, Norwegian banks had the highest losses since the banking crisis 30 years ago,” it explained.

The regulator said a total of 39 out of 49 pension funds had a negative result before tax in Q1. The decline in the stock market contributed to a value-adjusted return of -6 per cent (non-annualized).

Life insurance companies were also affected, posting a pre-tax profit of -0.3 per cent (annualised) of average total assets. A sharp fall in stock markets and negative value changes on derivatives contributed to a value-adjusted return, which includes unrealized value changes, of -2.7 per cent ( non-annualised).

Six out of 12 life insurance companies had a negative result before tax in the first quarter of 2020.

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