Austrian roundup: ECJ gender ruling, arithmetica, FMA
AUSTRIA - A mandatory second pillar would be a feasible way to fill the pension gap in Austria, widened by a recent European Court of Justice (ECJ) ruling, according to insurance consultancy arithmetica.
The ECJ recently ruled that annuities should not be priced according to the gender of the buyer, a decision that could lead to the repricing of life insurance products across Europe.
According to Christoph Krischanitz, managing director at arithmetica, this could lead to life insurance becoming more expensive for men and insurers having to deal with the imbalance of having too many women among their members - using exclusion criteria, for example.
In addition, Solvency II could lead to higher premiums, as insurers have to increase their capital before taking more risk.
"Overall, this will lead to less demand for life insurance, which is a shame because Austria is already on a very low level when it comes to supplementary pension provision," Krischanitz said.
He added that a mandatory second pillar would be "a way out" and an opportunity to "stabilise" the Austrian pension system.
Meanwhile, the Austrian supervisory authority FMA has released figures on the performance and asset allocation of Austrian Pensionskassen in 2010.
According to the supervisor, pension funds returned 6.5% on average, close to the figure released by the Pensionskassen association.
The returns ranged from 1.2% to 11.8% in the various investment and risk communities within the Pensionskassen, which providers have to offer companies according to their risk appetite.
Overall, government bond exposure decreased by 5.1%, while equities increased by 3.8% and cash by 2.2%.
In total, assets in the Pensionskassen increased by 3.2% to €14.9bn.