The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This technical note examines pensions with profit contracts in Denmark. The Danish life insurance and pension sector is sensitive to a range of risks on both the asset and liability side of the balance sheet. One of the principal vulnerabilities for the sector arises out of the requirement to achieve a high guaranteed return for the duration of 'in-force' policies. Although several measures have been implemented to increase provisions and capital, and for hedging interest rate risk through derivatives, the overall risk in the pension sector still needs to be closely monitored.