Author: angela@liv.fo

With the highest contributions to pensions and insurance so far, the year 2024 has gone well – for both the company and the customers of P/F Tryggingarfelagið LÍV.

The year 2024 was successful – for both the company and the customers of P/F Tryggingarfelagið LÍV.

The financial market performed well in 2024, just as it did in 2023. The company achieved a total return on its investment assets of DKK 356.5 million. Customers with market-based returns saw returns between 6.82% and 19.08%. The return depends on the level of risk chosen by the customer. Customers with the lowest risk received a return of 6.82%, while customers fully invested in equities received a return of 19.08%. The average customer with 15 years until retirement received a return of 10.20%.

Customers with medium risk at LÍV received a slightly better return than corresponding customers at Danish pension funds after tax. The company is pleased with that.

Contributions to pensions and insurance totaled DKK 453 million – the highest to date. Contribution growth compared to 2023 was approximately 9.2%.

The trend in customer acquisition and contributions has laid the foundation for the company to reduce the administration fee for customers with market-based returns. The administration fee was reduced from 3% of contributions to 2.5% as of January 1, 2025.

“Solidarity, where more shoulders bear the burden, should benefit the customers who own the company. Therefore, the administration fee for customers with market-based returns will be lowered once again, effective January 1, 2025,” says Jan Jakobsen, CEO of Tryggingarfelagið LÍV.

As we enter 2025, dark clouds are gathering over the financial markets. Uncertainty is greater than usual, and a possible trade war among several of the world’s major economies looms. This creates uncertainty, which has already been reflected in the financial markets during the first months of 2025.

Below are the key figures for the 2024 financial statements, which were approved at the annual general meeting on April 30, 2025:

At the annual general meeting on April 30, 2025, Hanna í Horni (vice chair), Kári Petersen, Súni Selfoss, and Árni Arge were re-elected. The chairman, Høgni Olsen, had announced that he would not stand for re-election. In his place, Árni Ellefsen was elected. The company thanks Høgni Olsen for his contribution over the past eight years as chairman of the board and likewise congratulates Árni Ellefsen on his election.

P/F LÍV lívs –og pensjónstryggingarfelagið (LÍV 3)

P/F LÍV, the life and pension insurance company, also held its annual general meeting on April 30, 2025.
Finn Danberg was re-elected and continues as chairman of the board, and Gunnleyg Árnafjall was re-elected and continues as vice chair. Kári Petersen and Árni Arge were also re-elected as board members. Høgni Olsen did not run for re-election, and in his place, Árni Ellefsen was elected.

LÍV 3 is a closed company that does not establish new pension agreements. The company has insurance agreements with benefit guarantees, for which the Government of the Faroe Islands provides backing.

The company had a good year in 2024. The result from investment activities yielded a return of just under DKK 214 million. The company holds investment assets amounting to approximately DKK 1.978 billion.

The net result after tax was DKK 126.4 million. Total insurance premiums for existing insurance agreements amounted to DKK 37.3 million in 2024.

Based on the company’s benefit obligations to its policyholders, the parent company has a negative equity of DKK 479.4 million as of year-end 2024.

The 2024 annual reports can be viewed here.

Severe Stock and Interest Rate Declines in March and Early April

Global stocks fell by a full 7.5 percent in March, and the decline has continued into early April. This brings the total drop since the beginning of the year to 15.9 percent. The losses have been greatest in U.S. stocks, with a weaker dollar also dragging down tech stocks and cyclical stocks. Stocks that are less affected by economic fluctuations, as well as value stocks, have experienced the smallest declines.

On the other hand, the price of safe government and mortgage bonds has increased, as both long- and short-term interest rates have dropped. Market turmoil has gradually also spread to corporate bonds, but here the losses have been very limited.

Prices of commodities such as oil, copper, gold, and silver have fallen significantly.

Why? Fears of a Trade War and Global Economic Downturn

On April 2, U.S. President Donald Trump significantly increased tariffs on all goods imported into the U.S., far more than expected. China responded with equally high retaliatory tariffs on U.S. exports to China, while the EU is preparing its own countermeasures against the U.S.

All of this increases the risk of a global trade war and an international economic downturn, with negative GDP growth, lower company earnings, inflation, and rising unemployment. The tariff hikes have the same effect on American consumers as a tax increase. At the same time, much business activity is coming to a halt, as companies are waiting for clarity on the future of global trade arrangements.

Therefore, all economists agree that the longer the uncertainty about trade wars and retaliatory tariffs continues, the greater the damage will be to economic growth and corporate earnings.

What Now? Possible Agreements Between the U.S., China, and the EU in Focus

In the near future, attention will be focused on whether agreements can be reached between the three major economic powers, which could reduce uncertainty. That would be very positive for the stock market, corporate bonds, and commodity prices.

Right now, there are no signs of goodwill from the Trump administration, but many investors hope that pressure from an increasingly dissatisfied business sector in the U.S. and from Republican politicians will persuade Trump to reconsider and lower tariffs again.

We will soon be moving into a new headquarters at Óðinshædd.

Therefore, we are organizing a competition for a name and logo. If you have suggestions for what the new headquarters at Óðinshædd should be called or ideas for a logo to decorate the building, you have the opportunity to participate in the competition.

The new building has three floors. Norðoya Sparikassi and LÍV will lease the bottom and top floors, while the middle floor will likely be a co-working space, ideal for smaller companies and businesses.

We envision the building having a short, catchy name and a logo that suits the activities in the building.

Anyone can participate in the competition, and there is no limit to how many suggestions you can submit. There is no requirement to submit both a name and a logo; you can submit suggestions for either one or both.

A prize of DKK 5,000 will be awarded for the best name, and DKK 5,000 for the best logo.

A judging panel will be appointed to assess the suggestions.

The panel reserves the right to freely choose between the suggestions, including selecting none, as well as to modify and/or combine different suggestions.

Send your suggestion with an explanation to kapping@liv.fo before April 14, 2025.

Please include your name, address, and phone number in the email.

By participating in the competition, you grant LÍV permission to use, modify, and publicly release the name, logo, and any related material (such as advertisements or descriptions) without consent or compensation.

From Positive Returns in January and February to a Market Decline in Early March

In January and February 2025, returns on both equity and bond markets were positive, but in March, the market quickly turned the other way with a decline in prices. Financial markets change as a whole, and it can happen several times a year that the market goes up and down like this.
Global equities returned 2.3% in the first two months of the year, and after a strong February, Danish equities increased by 4.2%, while Nordic equities rose by as much as 10%. Besides Nordic equities, European and Chinese stocks have also grown significantly, while the large American technology stocks – the so-called Magnificent-7 – which have declined significantly in recent years, have fallen.
The drop in the dollar has also impacted equity returns, as American equities, traded in dollars, make up 65% of the global equity index.
Interest rates, particularly on short-term bonds, dropped slightly at the start of the year. And despite historically low yields compared to safe government bonds, there was significant demand for corporate bonds.
These conditions led to returns of 0-2.6% on various bond types. In March, the trend reversed. Now, there is a decline in both equity and bond markets, and the strong returns from the beginning of the year have turned negative. At the same time, changes have occurred, especially in equity markets, with certain stocks performing better now; for example, European, Chinese, value stocks, and defensive stocks, which are less sensitive to economic fluctuations, while particularly the large American technology stocks are dragging down the market.

Why? Trump/Musk Turmoil and Changes in the Stock Market
Several reasons seem to explain the market decline and the changes in equity markets:

• The American economy shows signs of weakness. This is reflected in several key indicators, and many companies have announced that things aren’t going as expected in the first quarter of the year.
• One of the main causes of the unexpected weakness in the USA is undoubtedly the chaotic economic policies of President Trump, who frequently announces tariffs. Geopolitically, President Trump is also heading towards a breakdown in relations with several countries, and this turmoil dampens business confidence, affecting investment and global growth, corporate earnings, and thus equity prices.
• Uncertainty about AI: Despite an exceptionally strong earnings report from Nvidia in February, investors still question whether the massive investments, particularly in the U.S. technology sector for AI hardware and AI models, are sound, or if a large investment slowdown is ahead.

While the outlook for the U.S. is weakening, conditions are improving in Europe and China. Not least, because the upcoming government in Germany (CDU/CSU and SPD) plans a huge growth and defense package. However, it is still uncertain whether this will be approved, but if it happens, it would be very positive for German and European equities.

Investors are now focusing on cheaper value stocks, also called “value stocks,” outside the U.S., and at the same time, there is growing concern about growth, with increasing interest in stocks that are less affected by economic fluctuations.

While the unusually large German growth package made a positive impact on equity markets, there is also a large interest rate gap and falling prices in the bond markets. If the package is approved, it could lead to increased growth, inflation, and public debt in Germany, which would negatively affect the bond markets.

What Now? Politics/Geopolitics, Key Indicators, and Companies in Focus
Politics has a significant influence on financial markets these days, and with numerous statements, tariffs, the war in Ukraine, and other factors in mind, it is likely that this will continue in the near future.
If stability returns, it could ease market concerns, while attention will also be focused on whether the growth package in Germany will be approved.
Investors will also be keeping an eye on AI development, economic fluctuations, and the monetary policies of large central banks in the near future, and these, along with the upcoming first-quarter earnings reports from companies, will be crucial for future returns.

LÍV and Norðoya Sparikassi Move into New Building at Óðinshædd in Tórshavn

LÍV is building a new building, and it will be completed in the summer of 2025. The new building has three floors. Norðoya Sparikassi and LÍV will lease the lower and top floors, while the middle floor will likely become an office hotel, which is ideal for smaller companies and businesses. The building meets all modern requirements, with a focus on sustainability. Renewable energy will be used to heat the building, which is constructed with materials requiring minimal maintenance. For the tenants, attention has been paid to lighting, air quality, and sound conditions. There is also work being done to possibly install solar panels on the roof.

The business of Norðoya Sparikassi in Tórshavn has grown significantly since the branch opened in 2007. Although relocating is challenging, Norðoya Sparikassi will get a modern building, not far from the current location.
“In the process of finding new premises, it quickly became clear that this building would meet the needs of the savings bank for the future. Additionally, the new building will allow customers to access more financial services in one location,” says Marner Mortensen, CEO of Norðoya Sparikassi.

LÍV has been located at Kopargøta for many years but has wanted to move to more modern facilities for the benefit of both customers and employees.
“It will be an emotional move from Quillingsgarður, but the new building will provide the company with new opportunities and improve accessibility to the company,” says Jan Jakobsen, CEO of LÍV.

Since the building will have multiple tenants, the plan is to organize a naming competition for the building. This will support the identity of the building and make it easier to know where it is located and what activities will take place there.

For more information, please contact Arnfinnur Gudjónsson at 231112.

Positive Start to the Investment Year 2025 with European Stocks Leading the Way

2025 started well on global financial markets. International stocks rose by a full 3 percent in January, bond yields were around zero, while riskier credit bonds (corporate bonds and high-yield bonds) had returns between 0.5 and 1.3 percent.
European and Nordic stocks, in particular, have had a strong start to the stock market in 2025, growing by 6.5 and 4.8 percent respectively in January. Stocks in China have also risen significantly in value. Danish stocks disappointed once again with a drop of 0.2 percent, but the trend seems to have improved at the beginning of February. The large American technology stocks – the so-called Magnificent-7 – which have performed very well in recent years, have, on the other hand, fallen somewhat.
In the bond market, the difference between short-term and long-term yields grew in January, as short-term yields dropped slightly, while longer-term yields increased a bit. Demand for corporate bonds was positive last month, even though the extra yield compared to safe government bonds is near an all-time low.
Many raw material prices increased even more in January, with the price of gold and silver rising significantly.

Why? Trump Brings Joy, Uncertainty, and Conflict Regarding the Future
Although the presidential change in the USA has led to greater financial and geopolitical uncertainty, the returns in January have been good. Threats of tariffs on trade agreements also create uncertainty among investors, as do plans for large savings in the public sector in the USA.
There is broad agreement that a global trade war will hurt the world economy, especially the stock markets. However, the market currently expects that the threats of tariffs and possible retaliations from trade partners of the USA will not be too severe. On the other hand, it is expected that Trump will lower the corporate tax rate further and remove many regulations that particularly investors in stocks appreciate.
The progress of large US technology stocks has slowed a bit. This is due to very high valuations, disappointing earnings, and news that China is developing cheaper technology models that could compete with the highly expensive American models.
Investors are therefore concerned that technology will not generate as much revenue as expected due to the tough competition from China.
The US economy continues to grow, despite some signs of weakness in the construction sector. Growth in the European economy is somewhat lower, and the same is true for inflation. As a result, the US Federal Reserve has stopped its interest rate cuts, while the European Central Bank continues its rate cuts, which benefit short-term rates in Europe and Denmark.

Everything Still Awaits Trump
Investors worldwide have been waiting eagerly to find out what policies Donald Trump would introduce after he took office again as president on January 20. Much has been revealed now, but there is still significant uncertainty regarding his real plans in the major political areas that matter for financial markets. This applies to both the handling of public savings, the use of tariffs on trade agreements, and how these will be responded to. Not least, how the EU and China will react.
It can be said that the market knows more now, but still not much. Therefore, political statements from Donald Trump in the coming time will continue to create ripples in currency, stock, and bond markets.
There will also be focus on the economic trends in the US and Europe, the monetary policy of the Fed and ECB, and how the Chinese government manages the slowdown in the Chinese economy and the serious downturn in the housing market.
Furthermore, technological development may become very important, and here are two possible scenarios:

Positive Scenario:
Most technology executives in the US do not believe that cheap Chinese technology models, such as Deepseek, will undermine their ability to generate profits. On the other hand, cheaper access to technology will increase demand, and thereby keep both profits and stock prices up.

Negative Scenario:
Many technology experts and economists believe that the US tech giants are investing too much in technology and other areas like computer chips, data centers, networks, and so on. This could be compared to the late 1990s, when large investments in the internet led to economic downturns.

Therefore, it is expected that the financial markets will closely watch Trump, technological developments, economic trends, and monetary policies of the major central banks, which will be crucial for the returns in the coming months.