DENMARK - Pension contributions to Denmark's AP Pension have climbed steeply over the last 12 months, the company's first-half report showed, but investment returns were slim or negative for unit-linked customers.

Gross contributions rose 18.1% to DKK3.26bn (€438m) in the January to June period from DKK2.76bn in the same period in 2010.

Managing director Søren Dal Thomsen said: "Growth of almost 20% is a particularly good result. We are pleased the good development is continuing. If we look back over the course of the last four years, 2007 to 2011, we have nearly doubled our business."

AP Pension, a major commercial pension provider that is also customer owned, reported an investment return of DKK122m, down from the DKK3.3bn reaped in the first half of 2010.

For customers with AP Pension's new unit-linked product - AP Basic - returns ranged from a loss of 1.1% to a profit of 0.2%, depending on the investment profile. Those with the traditional with-profits pension saw returns ranging between 3.1% and -0.6%.

"The first half of 2011 has been difficult for our customers with unit-linked pensions, but good for our with-profits customers," Dal Thomsen said.

"We have gained many new customers and high contributions. In a difficult market, the financial result is fine and reserves are solid."

Returns for customers with traditional with-profits pensions had improved in July and August, AP Pension said.

It added: "The period of just under two months since the first-half report have been marked by falling equities prices, falling interest rates and rising bond prices.

"The result for AP Pension's customers with traditional pension plans is a clear profit.

The loss on shares has been offset many times over by the profit on interest-rate hedging and bond price rises. In the five yield groups, the return stands at between 5% and 10% at the moment."

Collective reserves for the with-profits scheme stood at between 5.2% and 8.2% at the end of June.

AP Pension's total assets increased to DKK49.2bn in the first half from DKK46.9bn in the same period last year, while solvency coverage dipped marginally to 118% from 119%.