Life insurers suffer from the low interest rates. They should therefore increase their reserves and to lower the minimum interest rate for new contracts. Both shows that the state is increasingly concerned about the model of life insurance. Insured can be more public pressure just right higher provisions and lower guaranteed future interest rates increase the chance that they get at the end of the term really does them the promised money. A complete new policy, but is increasingly unattractive.
Interest rates are still down - and that makes the German life insurers increasing problems. According to a report in the Financial Times Germany "urges the Financial Supervisory Authority of the industry, she was to the Provisions for completed in 1995 and 2000 policies increase. Otherwise they could have problems that their customers pay in this time guaranteed returns. Responsible for requirements and provisions, the Federal Treasury, which would change the so-called premium reserve regulation.
Life Insurance: On average, still 3.4 percent interest
insurance contracts that were completed between July 1994 and June 2000, must bear interest of at least four percent annually until the end of their term. In the current interest rate environment, it is difficult to generate such interest. Ten-year government bonds pay about currently under three percent. Insurers still have a cushion of previously purchased securities that give them a year significantly higher interest rates, but this cushion is shrinking because even with regular departures papers - that is, they shall be reimbursed by the federal government and other debtors. The money will then be recreated must bring, on average, only lower interest rates. Three percent rate of return is not enough anyway. Calculated over all contracts, credit life insurance companies have their customers on average at least 3.4 percent.
For the insured has no effect once the first attempt: Your interest rate is guaranteed to pay him, is for the provider - Not for the reserves would have to increase at the expense of their own profits. For shareholders of Alliance & Co. this could indeed be bad news, but, given the known problems - was predictable. So far, probably only a small part of the total affected over 95 million policies. After the year 2000, the guaranteed interest rate of 4.0 percent lowered gradually - in July 2000 to 3.25 percent, 2.75 percent in 2004 and 2007 to 2.25 percent.
guaranteed interest rate is down at 1
July 2011 could drop the guaranteed interest further. The Federal Ministry of Finance puts the pressure, the guaranteed interest rate then screwing down to 1.75 percent. Insurance industry and consumer advocates are biszum 14th January take position on the plans, after the Finance Ministry decides whether the interest rate will be reduced next year. Insurers must guarantee customers a maximum of 60 percent of the average government bond yield over the past ten years. Their average is to get data of rating agency Assekurata at around four percent. So still a guaranteed interest rate of 2.4 percent would be possible. The industry association GDV will therefore also reduce until January 2012 interest rate guarantee, and then only by a quarter percentage point to 2.0 percent.
The dispute over the guaranteed interest rate reflects the two opposing positions: the insurers want to for marketing reasons as much as possible to stay up - "guaranteed 2.25 percent" sells better than just 1.75 percent. The Ministry of Finance is rather safe. Marketing concerns of the industry can have the ministeriales cold. For it is one only that the insurer does not take itself too high promise - and then at the end of the state would have saved wohmöglich.
All such model calculations are based on a certain amount reason for optimism: They insinuate namely, that holds the Euro-zone that major countries do not go broke and survive all the banks about two-thirds of the investments of life insurers are in fact linked in any way with bank risks: banks bonds, direct loans to banks, bank deposits and mortgage bonds.
Against this background, the battle for the guaranteed interest rate ultimately an exhibition game: all those who have a policy, he may ultimately matter. For in the first 1.75 percent would apply only to new contracts and secondly, all insurers now pay considerably more than this guaranteed interest, namely, the guaranteed interest rate plus a voluntary profit sharing plus terminal bonus. The amount depends on what brings out the insurer returns from his investments.
The average interest rate for life insurance, according to industry sources in 2011 was around 4.1 percent. The alliance has reduced the return on their policies just from 4.3 to 4.1 percent, the Debeka lowered from 4.6 to 4.3 percent, Axa Life will hold the sum of the guaranteed interest rate unchanged at four percent and net income, as the old Leipzig (4.1 percent) and the Huk-Coburg-life (4.25 percent). R + V on the other hand decreases from 4.3 to 4.1 percent.
important to know the different sizes of return (guaranteed interest, profit participation and final income) do not refer to the total premiums paid, but the contributions after deduction of costs, risk premium and the commission of the insurer. That are averaged together 20 percent of the contributions of poorly managerial insurance about it.
Source: www.wiwo.de
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