GERMANY – Allianz Leben has reported a strong performance in its pensions business in the first half as a growing number of people are turning to private pension schemes, but Riester pensions are still “disappointing”.
Premium income in the first six months of the year for the German insurer totalled 4.7 billion euros, representing an increase of 5.9% year on year, and new business increased by 23.2% to 1.5 billion euros.
The increase in new business and growth in premiums has been attributed to the fact that more and more people are turning towards supplementary private old-age provision.
Says Allianz: “A growing number of customers are topping up the declining benefits of the statutory pension scheme through private pension schemes.”
Corporate pensions business increased significantly in the first half. Compared with the same period the year before, the number of policies concluded with employees rose by 117% to a total of 202,000 contracts with premiums due from new business rising by 68.8% to around 540 million euros.
Riester pensions products are still failing to attract interest, however. “The selling of Riester pensions has shown disappointing results this year,” says Allianz. By the end of June, the total number of Riester policies taken out with Allianz was just under 643,000. The increase in take-up this year has been extremely poor. Allianz reported 598,000 Riester personal pension contracts at the end of 2002.
Last month the German Institute for Retirement Provision, the DIA, blasted the Riester reform for “going backwards”. Reinhold Schnabel, a professor at the University of Essen said: “The Riester reform has failed. Around 70% of the nation is shunning the product, as increasing new discussions about pension reform are unnerving citizens. Around 300,000 private Riester Rente applications have been cancelled, while only 200,000 have been taken up!”
Allianz AG board member Paul Achleitner was positive about Riester products. He said: “Some people are pointing to the fact that there is not as much sold on the retail side, in terms of Riester products.
However, they shouldn’t overlook the fact that there is a wave of incentive-based corporate pension schemes building up that are being distributed through corporate channels, rather than being sold over the counters of banks and insurance agents. You have to understand the overall picture to draw a conclusion. And actually, it's a rather encouraging one.”
Munich-based Allianz Leben is the life arm of German financial services firm Allianz.