GERMANY – The government-subsidised Riester pension products, which were launched in 2001 to encourage pension savings but that have have sold poorly, could be “on the brink of a comeback,” according to Allianz Group chairman Michael Diekmann, who declared, for the first time, that his annual pay increased by 3% last year to €2.5m.

“Allinaz Leben the group’s life insurance_arm has sold 143% more Riester contracts during the first eight weeks of the year than in the equivalent period last year,” he said as he presented the group’s 2004 annual report.

Diekmann said its study of the market showed people who are in position to save are now “willing to take more responsibility and save regularly” for their pensions.

He added, however, that “many people have no faith in the advice of financial services providers”.

Germany’s insurance industry has so far benefited more from Riester than its asset management industry. According to the German Insurance Association (GDV), 3.5 million of the 4.2 million Riester contracts are insurance-related.

In its annual report, published today Allianz Group said it has posted a €96.8bn in total revenue in 2004, up 3.3% since last year.

Asset management earnings were €399m after taxes, compared to 2003’s €282m, while the division’s expected loss halved last year from €270m to €152m.

Third-party fund assets rose €20bn to €585bn with more than 70% of the segment’s assets coming from the US and more than 15% from Germany.

The fixed income business saw €31bn in net inflows.

Allianz has also disclosed for the first time top management’s remuneration and benefits, revealing that chairman Diekmann received in 2004 a €2.5m pay—3% more than the previous year. The figure breaks down to a €1.6m bonus and a €900,000 fixed remuneration.

It is also revealed that Allianz has paid €2.3m to increase the board of management’s pension reserves. The sum compares to the €1.1m contribution paid in 2003.

It was not clear whether the group has also paid extra contributions to staff’s pension arrangements, as a spokesman for the group declined to comment.

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