Allianz life insurance reduces the surplus share for 2011 of 4 , 3 to 4.1 percent. Most life insurers based on the decision of the alliance. Others have already forged ahead.
Fault that the Alliance is to reduce the income yield of the life savings portion of 4.3 to 4.1 percent must be the "historic low interest rates," proclaimed Maximilian Zimmerer, head of Allianz Life division. In fact, the yield was ten-year government bonds during the year fell to 2.1 percent, three percent today.
Three percent rate of return not enough, however, because life insurers have to credit their customers an average of at least 3.4 percent. This is due to the contractually guaranteed interest rates. This guaranteed interest rate for new contracts now stands at 2.25 percent. He was once in up to four percent, life insurers have to their customers on average more credit. The profit-sharing is then composed of the guarantee plus interest along the interest rates earned by life insurers on the guaranteed interest rate and also passed on to customers. New customers do
more
But alone with the guaranteed interest rates averaging 3.4 percent a life insurer can score points with its customers. To win new customers, companies must offer more. The carpenter wants: He promises at least 4.7 percent for the year 2011. He can, because the annual profit sharing - that life insurers traditionally pay for the cost of invested capital (savings component) - is not the only source of profit.
is added to the surplus of final income. That is how the profit sharing part of the total return. He is paid at the end of the term of a life insurance policy.
Immense gains
addition - it sounds paradoxical - benefit customers whose policy is paid out or cancel the current low interest rates. For life insurers, customers must participate in the valuation reserves. That arise when the share prices of the bonds exceed the purchase price. Bonds are traded to the redemption date on the exchange. Increases the rate decreases the return on bonds because the price and yield behavior are contradictory. As the interest rates on ten-year government bonds up to 2.1 Percent have fallen, life insurers recorded huge gains, some up to 40 percent. Thanks to the high proportion of fixed interest securities such as government bonds, corporate bonds or mortgage bonds, the valuation reserves to increase rapidly. Because the industry invests on average about 87.5 percent of the money in bonds, may also expect customers of other life insurers with valuation reserves. It must life insurance customers have been participating since 2008 at the end of the contract - in the alliance, on average, makes 0.2 percent (as of 11/17/2010) additional interest for those who take his leave of the insurer.
is in the industry, the surplus decision of the alliance life as the way forward. Many life insurers based on the interest of the alliance. In the coming days, so many insurers will announce its interest rate for 2011. Nevertheless
have already ventured some insurers from the alliance of the cover. Thus, the AXA life and also keep unchanged the French insurer owned by DBV life is the sum of guaranteed interest and excess of four percent. Including final bonus and valuation reserves customers can expect around 4.8 percent. Alte Leipziger (4.1 percent) and the Huk-Coburg-life (4.25 percent) to keep their profit sharing for 2011 stable. R + V on the other hand it reduces the second time in a row. For 2011, customers get only 4.1 percent instead of 4.3 credited (2009: 4.5 percent).
Ergo: four percent, sometimes less
Ergo Life announced today that amounts to "the continuing interest in the rule continues to 4.0 percent. The phrase "generally" had been chosen, according to a spokeswoman, because "a small number of tariffs" would get less. The choice of words, however, relates not to just under the umbrella brand Ergo Victoria refugee life. Ergo recently had his business under the umbrella of Ergo bundled and transferred to new business on the new brand. For the life of Victoria, it was not in the past gone so well: Manager of the Victoria life had the beginning of the decade, a high equity exposure. The Victoria sold the shares too late, after the bursting of the tech bubble. The then high valuation reserves melted - just like the major provisions for premium refunds, an important buffer for life insurers, among other things because they pay them later, the excesses of their customers. This was after-effects: Victoria could pay for 2009 only a profit sharing of 3.6 percent - significantly less than the market.
Lean three percent
This leaves many major life insurance companies, despite the low interest rate environment, with its yield above four percent. The rating agency Assekurata has calculated that life insurers the four-percent threshold should also hold for a while. In a model calculation assumes the agency that insurers can invest new money only to three percent. Precisely at this level have reached ten-year government bonds today. On average, the yield on the bond portfolio, the insurer would then slide until 2014 under the four-percent mark. Even so customers
benefit from the long-term nature of investments and securities with higher coupons, the life insurers in better interest rate and the run-times bought a few years. Interest rates remain so low, of which the alliance starting in the next three years, the tide is turning but the long term. For life insurance companies buy today the low-interest papers. And then lie like lead in the portfolios - when interest rates are far higher again.
Source: Business Week, 08.12.2010
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