The market for occupational pensions in Austria offers a sizeable margin of growth for established firms able to take advantage of opportunities by finding synergies with start-ups, according to panellists at an online occupational pension event organized by Insurtech Finabro.

Manfred Bartalszky, member of the board of directors at the Vienna Insurance Group, said there is “great potential” in this arena, adding that the company has motivation to bring occupational pensions to the market with other partners.

According to a survey conducted by the group, 37% of respondents do not believe in state pensions, while 70% do not believe that living standards can be covered by state pensions.

For Martin Sardelic, chief executive officer of Valida Holding, occupational pensions have shown “little to no” progress in the last few years, adding that the next generations will bear the costs of financing pensions.

Sardelic said that two important aspects to focus on for occupational pensions are the underrepresentation of women and the level of their average pension that is “massively low”, while a first pillar system faces “massive risks”.

For Wolfgang Weisz, head of occupational pensions at Allianz Austria, the insurance industry is tasked with finding solutions for parties interested in occupational pensions, often perceived as complex, but with “a lot of benefit for employees and employers.”

Asked about the Austrian population’s perception of the second pillar system, companies and decision-makers in general, the CEO of Finabro, Søren Obling, said he also sees “a great potential for catching-up”.

“The topic of occupational pensions is not a must have yet in the industry,” he said, comparing Austria with Denmark where it is “unimaginable” to get a job without an occupational pension.

“We have a great opportunity as an industry – we are big enough, we have enough innovative strength” to address the younger generation in particular on occupational pensions, he said.

The financial stability of the Austrian pension system raises the question of reforms, their impact on younger generations and the role of the industry to promote change.

The associations and the industry overall work incessantly to bring about changes, “unfortunately at the moment other issues have priority. But we will not give up,” Bartalszky said.

One concrete proposal relates to employees’ right to claim deferred compensation on occupational pensions, akin to the German model, and “with good wind we will succeed [on passing the proposal] in Austria”, Weisz said.

Obling sees room for a new type of communication with the population but also with the government on reforms. “Our mission as a start-up is to come up with new proposals” so that the attention on the subject remains high, he added.

Digital steps

Finabro believes it makes sense to work together with large players to digitally support the advisory process on occupational pensions, or streamline administrative work.

“In our business model, we have found ways not only to convince employees but also in the execution [of occupational pensions],” Obling said.

The pandemic has accelerated changes and opened new perspectives on the use of digital tools for internal business operations and external customer service.

Jochen Zöschg, member of the board at Zurich Insurance, said the COVID-19 pandemic had forced many to implement digital measures, but believes in a “smart mix between digital and analogue” advisory work.

“Start-ups can provide us with a lot on something where we are stuck on, where we have been in the same corner for 30-40 years,” he added.

Bartalszky believes that the shift to “pure 100% digitization will not happen”, however the crisis has pushed for a faster transition to digitization.

The pandemic has been a game-changer in particular for the acceptance of digitization in business models, Sorderlic noted.

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