Danish roundup: PKA, Forsikring & Pension, PenSam
DENMARK – Tougher demands are costing Denmark's pensions industry $1bn (€773m) and will force the market to shrink to between 10 and 15 players within the next decade, a leading industry figure predicts.
Peter Damgaard Jensen, managing director of PKA, said in a speech: "The stricter requirements of the industry cost more than $1bn, and when costs must be kept down, it will mean continued consolidation in the industry."
Damgaard Jensen, who is also chairman of industry association Forsikring & Pension (F&P), was speaking to people in the finance industry in Copenhagen.
"At the same time, the industry's focus on developing internet service and on new products will increase the need for alliances," he said.
Because of this, within 5-10 years, there would be just 10-15 companies working together in the sector – either in the form of outright mergers or concrete work, Damgaard Jensen said.
This process of consolidation would mean increased professionalism and fewer costs, he said, adding that this was also PKA's experience with the establishment of management company Forca.
But the Danish pensions industry had a lot to be glad about, he said, mentioning its recent ranking by Mercer as the world's best pension system, and the OECD's judgment that the county's pension providers had produced the best returns.
The latest big pensions merger in Denmark was completed at the beginning of this month, with financial sector pension fund FSP joining with commercial player AP Pension under the AP Pension name.
In other news, labour-market pension provider PenSam Liv has said it is ready to pay a fine for failing to send annual statements to some customers over a three-year period.
The pensions group was reported to the police by the Danish FSA a few days ago.
It said many thousands of pension savers had been affected by PenSam's failing.
In 2009, 11,000 customers did not receive their legally required annual statement, and in 2010 the number was 12,000, it said.
In addition to this, in 2009, around 9,000 customers only received their statement after a delay of up to six months, the regulator said in a statement.
Annette Bjaaland Andersen, head of the FSA's consumer department, said: "In our view, there was a serious breach of the rules because the problem of the lack of financial statements has been going on for several years, and because PenSam had already been ordered to send annual statements to all customers in 2008."
PenSam acknowledged in a statement that a breach of the information order was punishable by a fine.
Helen Kobæk, managing director, said: "We take the case seriously, and are ready to pay a fine for failing to comply with the rules.
"In order to avoid this happening again, we have centralised our IT operations and increased the management focus on the area."
PenSam said the missing statements were a result of problems making IT systems correspond.
The FSA said it intervened this spring after several specific inquiries about customers who did not receive their annual statements.
This was despite the fact PenSam had told the FSA in March 2010 that it did not expect any more problems with the distribution of statements to all customers, it said.
PenSam should have informed the FSA at a much earlier stage about the ongoing problems in complying with its duty to publish financial statements, the regulator said.