GERMANY - Financial services firm AWD says its first-half results show it is on track to lifting the share of corporate pension products to 10% of total sales by the end of this year.
Hanover-based AWD said that as of June 30, it had sold corporate pensions to 3,900 firms. New clients included the music entertainment channel MTV, the spectacles chain Apollo and several auto component suppliers.
As a result, the business rose to 8% of total sales compared with 6% at the end of 2004. “The business continues to be a main driver of our growth,” the firm said.
AWD added that following the recent hiring of 130 corporate pensions specialists, it now had now 480 on the ground.
However, AWD’s first-half sales slipped by 1.1% to €305.7m amid weakness in its traditional business of selling life insurance policies. With enactment of a government pension reform at the start of 2005, a tax break on capital-backed life insurance policies was removed. This traditional retirement savings product has since fallen out of favour in Germany.
Chief executive Carsten Maschmeyer noted that along with the axing of the tax break, the reform meant that the state pension would be significantly reduced.
“Everyone, politicians, the media and investment advisers must make the consequences of the reform clear to the people. And that is: Saving for retirement used to involve what one had left. Now it is a necessity,” Maschmeyer said.
As a result of the reform, the full state pension benefit is due to fall to 43% of a previous salary from 2030 from 52% currently.