The insurance industry profited from the low interest rates in an almost secret way.

Of course, life insurers have had a hard time nibbling on the lower earnings opportunities.

But their high valuation reserves have often made them appear attractive compared to all investors.

This has enabled them to offer better returns than their competitors for many years.

Phillip Krohn

Editor in business, responsible for "People and Business".

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With the turnaround in interest rates, this challenging but at least partially comfortable starting point is over.

Because the reserves have melted, the market interest rate is higher than the current interest rate of insurers.

As a result, the single-premium business is also losing momentum.

The fact that German life insurance recorded a sharp drop in premiums last year is mainly due to this fact.

By 18 percent, the income from single premiums has declined.

Such policies had previously been used in part to park expired other investments.

The industry has always understood that these short-term contracts would only be of interest as long as they yielded slightly higher interest rates than other forms of investment.

Regular contribution business was stable

Norbert Rollinger, President of the industry association GDV, was therefore satisfied on Thursday with the relative stability of the old-age provision business.

In an online press conference, he presented the business figures of the 460 member companies for the past year.

Life insurance against regular contributions even recorded a slight increase in income of 0.6 percent.

The cancellation rate remained constant at 2.6 percent of all contracts over the year.

In company pension schemes, new business grew by 13 percent.

On the other hand, business with Riester pensions has declined considerably.

This underlines how necessary a reform of private old-age provision is, as is now being sought in the focus group on private old-age provision chaired by the Federal Ministry of Finance.

This started work this week and is due to present a concept by the summer break, which should lead to a legislative procedure in the fall.

"Everyone agrees that after 20 years without any fundamental changes, private old-age provision needs a fresh start," emphasized Rollinger.

Riester proved to be too complex.

The combination of a mandatory 100 percent gross premium guarantee and a record low maximum actuarial interest rate of 0.25 percent meant that the product could no longer be offered profitably by insurers.

"It's easier, more profitable and more sustainable," he said.

Insurance for reform of Riester or citizen's pension

The insurers are going into the negotiations with two offers: either to reform the existing system and streamline the subsidy system, or to introduce a completely new concept that they call a citizen's pension.

For every euro that households save, the state should add 50 cents in funding.

The guarantee level should be reduced to 80 percent of the contributions in order to enable more attractive returns.

At the beginning of retirement, a large part of the capital should be converted into a monthly pension, but more money than before should be able to be withdrawn as a one-off payment at the start of retirement without losing the subsidy.

In contrast to the fund industry, however, insurers generally insist on life annuities.

"No matter how old a person gets, only we insurers can do that," said Rollinger.

The sharp drop in single premiums has pulled the business figures for the industry into the red overall.

Income from the three lines of business, life, property and health, fell by 0.7 percent.

After the record claims year 2021, the insurance industry assumed that it would be able to reduce expenses.

But inflation has made workshop, building material services and disputed amounts in legal protection insurance more expensive.

"Higher prices lead to higher benefits from insurers, the same damage costs more today than it did a year ago," said Rollinger, who runs the Wiesbaden R+V insurance company in the main office.

Health and claims divisions have grown

With growth of 4 percent, the property-casualty division was profitable this time after the year of losses caused by the Bernd storm.

Health insurance revenue increased by 1.8 percent.

Long-term care insurance made double-digit progress thanks to a strong increase in benefits from statutory insurance.

The number of people with full health insurance fell by 0.6 percent.

For the coming year, Rollinger is less concerned about these two divisions.

"The level of uncertainty is currently highest in life insurance," he says.

Interest rate developments are slowing down business, but are leading to more attractive conditions.

That could improve in the second quarter when households have wage increases and government support.

General Manager Asmussen was optimistic that politicians could dynamize support in a new provision model and standardize the child allowance to 300 euros regardless of the age of the children.

Rollinger advertised that insurers were the first industry to be able to quantify their ecological footprint for part of the capital investment of 1.9 trillion euros: every share investment of one million euros is associated with the emission of 71 tons of CO2 equivalents.