Denmark’s AP Pension has revealed a fall in one-off contributions last year, including transfers from other pension schemes, to DKK6.3bn (€850m) from DKK7.6bn in 2019, blaming stiff competition in the pensions market.

Reporting 2020 financial results, the mutual pensions provider lauded the returns it had generated as the highest in the Danish pensions industry.

In absolute terms, the overall investment return for 2020 was DKK9.6bn, according to the figures released, down from 2019’s gain of DKK15.9bn, with returns on its market-rate lifecycle product coming in at between 7.7% and 12%.

Bo Normann Rasmussen, chief executive officer of AP Pension, said: “The competition in the corporate pension market is fierce, and we are constantly finding that the price of the insurance package is decisive in the battle for customers.”

AP Pension said that as a business it had ended the year with a pretax profit of DKK88m, in contrast to the situation in 2019 when it made a DKK72m loss.

The Copenhagen-based pensions firm attributed this reversal in part to a reduced loss on its health and accident insurance business, which produced a negative return of DKK131m, compared to 2019’s loss of DKK892m.

“We have experienced a significant improvement in the result of our health and accident insurance in 2020, but a large part of it stems from changes in the way we make up our provisions, which we do not expect next year,” said Rasmussen.

At the end of last year, Denmark’s Consumer and Competition Authority called out the practice of large Danish pension funds offering corporate clients insurance as a loss-leader, saying the fee model was preventing new players from asserting themselves in the market.

AP Pension reported that its total assets under management grew to DKK171.3bn, from DKK161.3bn at the end of 2019.

The pension fund said interest in its sustainable pension product, AP Sustainable (AP Bæredygtig), had continued to rise.

Launched in summer 2019, it said the product had amassed nearly DKK1.7bn of savings, with 15,000 of AP Pension’s customers choosing to put some or all of their monthly pension contributions into the option.

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