KLP: Good result despite uncertain times

23 February 2021

KLP delivers a value-adjusted return of 4.2 per cent for 2020. Customer profit amounts to NOK 12.4 billion.

KLP achieved a return on customers’ funds of 2.8 per cent in the fourth quarter, and 4.2 per cent for the whole of 2020. The book return ended at 4.8 per cent. A good increase in the value of bonds and real estate has contributed the most to the result, but the equity portfolio can also show a significant increase in value in the fourth quarter and thus a satisfactory return for the year as a whole.

– We can enjoy a good annual result with stable operations and good returns for our customers despite the major challenges that, among other things, infection-reducing measures have posed to the economy, says CEO Sverre Thornes of KLP.

Special conditions in the fourth quarter

As a result of product changes in public sector occupational pensions that came into force on 01.01.2020, KLP was able to release NOK 23.2 billion in premium reserves. The released premium reserves are added to the customers’ premium fund in full.

KLP Bank issued green loans totaling NOK 284 million in the fourth quarter. In total for the year, this gave a market share of just over 56 per cent for green loans to municipalities, county municipalities and publicly affiliated companies.

The KLP funds can refer to net new subscriptions from external customers of NOK 2.4 billion in the fourth quarter and NOK 10 billion in net new subscriptions in 2020. In comparison, the net subscription was NOK 5.2 billion the year before.

The market situation

KLP maintains its strong market position in public sector occupational pensions. Most municipalities and counties that considered postponing their pension schemes chose to stay in the company. A county municipality and some companies with closed pension schemes chose to move to other suppliers. The move itself applies from 1.1. 2021

All KLP’s businesses strengthened their market position and delivered good financial results both in the fourth quarter and the year as a whole.

– It is gratifying to see that more and more of our owners and their employees use the products and services we have developed for them, says CEO Sverre Thornes.

Key figures after the fourth quarter of 2020

Value-adjusted return on capital 4.2 per cent
Book return on capital 4.8 per cent
Premium income (excluding transferred reserves) NOK 34.3 billion
Paid pensions and other claims (without transferred reserves) NOK 20.7 billion
Total assets KLP Group NOK 807 billion

Source: KLP
Multiple reports with cicle diagram and text

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