AEGON picks up 'gap' Czech pensions business
CZECH REPUBLIC - AEGON's Czech pension fund attracted 3,000 members in In the first three months of its existence, according to industry figures.
Data published by the Czech pension fund association (APF) reveals, by comparison, the long-established Generali pension fund only increased its client base by 2,000 in the first nine months of 2007.
AEGON started insurance and pension operations in the Czech Republic in 2004 but only began offering a pension fund in the voluntary supplementary pension sector in June 2007.
The Dutch insurance firm currently has an 18% share in the Hungarian pension fund market, along with a 15% share in Slovakia and 3% in Poland where the market share could increase after the acquisition of pension fund offered by BRE bank. (see earlier IPE article: Aegon to merge Polish pension funds)
It also offers funds in Romania which started its new mandatory system two months ago. The next target market for AEGON is the Ukraine.
AEGON wants to achieve a 10% market share of the whole mandatory pension sector in Central and Eastern Europe (CEE) by 2010, the group noted in a CEE strategic paper.
The AEGON Czech pension fund fills the gap left by the merger of the two funds Zemsky and CSOB Progres earlier this year. (see IPE coverage: Czech merger brings funds down to nine)
Since the launch of the Czech voluntary supplementary pension sector in the mid-1990s the number of funds has reduced from 44 to 10.
Only the former Winterthur pension fund - now branded under the name of its new owner Axa - lost clients in the first nine months of 2007.
Funds with the highest growth in clients are the two largest funds: Penzijni fond Ceske pojistovny (+84,000 members) and Penzijni fond Ceske sporitelny (+58,000).
In total, the t10 funds had 3.9 million members at the end of September - 253,000 more than at the end of last year - while members' assets increased from CZK136bn (€5bn) to CZK155bn.
At the same time, however, the International Monetary Fund (IMF) demanded further pension reforms in the Czech Republic.
"The Czech Republic remains one of the few countries that has yet to start reforming its pension system," the IMF noted in its last consultation conclusion statement on the country. http://www.imf.org/external/np/ms/2007/112107a.htm
"Raising the retirement age to 65 years is welcome, but unlikely to restore pension viability. Complementary reforms to increase the effective retirement age and reliance on private pensions will also be needed," the organisation added.
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