Faroese life insurers post far lower returns than Danish peers

Faroese life insurance and pension funds deliver annual returns of 3.2 percent on average, less than half the 6.8 percent posted by their Danish counterparts, according to a 2024 study published by the Faroese Financial Supervisory Authority.

The review, covering 2019–2023, found that Danish policyholders receive more than double the payouts of Faroese clients over the same period.

Returns among the three Faroese providers—LÍV, Betri pensjón, and Lívsverki—range between 3.2 and 3.5 percent. The authority notes that even small differences in annual returns significantly affect long-term pension savings. For a worker earning 30,000 krona monthly who contributes 15 percent to a pension, a 3.2 percent return over 40 years yields roughly 2.6 million krona, whereas a 6.8 percent return would reach about 6.7 million krona.

The regulator has no new data but plans to conduct a fresh analysis later this year.