Photo: DPA
In future, Allianz's new products will have guarantees that ultimately mean loss.
Customers can only choose how high the loss should be.
Anyone who puts a hundred euros in their savings stock today will still have a hundred euros in ten years.
At Allianz, you can only be sure in the future that it will be 90, 80 or even 60 euros.
Who would have thought that Allianz would give up offering products that at least prevent loss?
Who would have thought that the savings stocking would one day bring better guarantees than Allianz?
How could it come to this?
High costs, low interest rates and miscalculations.
This mixture has brought the entire life insurance industry in Germany to the brink, with the industry leader in the lead.
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The insurers themselves are responsible for the high costs.
Internally, many companies work with outdated, inefficient and expensive IT.
Digitization has only been a priority topic in insurance companies for a few years.
Much too late.
This takes money and increases costs.
In addition, there are agents who demand high commissions.
Measured against the guaranteed benefits, the sale of life insurance as a retirement provision is two to three times as much as in the 90s.
And the industry is successfully resisting a cap on these commissions.
High costs prevent reasonable guarantees
However, high costs prevent reasonable guarantees.
So if Allianz will only guarantee the loss in the future, then that is particularly due to the costs.
Instead of reducing costs and possibly messing with sales, Allianz will in future only guarantee customers the loss.
Allianz and the other insurers can do little for the low interest rates.
But for many decades they have always bought government bonds, sometimes with poor interest rates, on behalf of customers, and have thus helped cement the low interest rates, especially in recent years.
In return, the finance ministers have always been friendly and with new laws and regulations have helped insurers get hold of customer money.
In the last ten years alone, insurers have withheld 100 billion in surplus participation from customers.
Allianz alone has set aside around twenty billion in the additional interest reserve and the free RfB (provision for premium refunds), money that was actually intended for surpluses.
Perhaps at some point the insured will see something of this as a surplus benefit.
But that chance is very slim.
Miscalculation costs customers a lot of money
The miscalculation is the most serious problem, also at Allianz.
In the 80s and 90s, the actuaries calculated with high guaranteed interest rates of up to four percent (at that time I was also part of the Allianz actuary).
Nobody had thought whether that would be a solid calculation.
We calculated the tariffs based on the motto that the four percent would always be achieved.
In retrospect, it was naive and stupid.
It was not worthy of an actuary to calculate products that would run for decades with an almost religious belief in high interest rates.
This miscalculation costs money, a lot of money.
Money that the insurers are now taking away from customers and that was actually intended for profit sharing.
It is significant that at Allianz Lebensversicherung there is no longer an actuary at the top.
It is significant that the General Association of the German Insurance Industry is now led by a former top political official, ECB director and investment banker, who earned his merit in the financial crisis by winding up the bankrupt countries.
Now he is in the process of representing the bankrupt life insurance industry as chief lobbyist.
His future topics will consistently be liquidation, run-off and the bankruptcy pool protector.
Allianz Pension Fund - Customers can only hope
Allianz has always given the impression that it would not rely on liquidation or sale in life insurance.
But after sales abroad, she has now announced that she will close her pension fund here in Germany.
For those who have their retirement provision there, only the principle of hope remains.
Because where there used to be a competition that ensured that Allianz had to compete with competing products, there is now no competition.
This pension fund is now in the internal run-off.
The contracts are only processed.
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Allianz is not alone with this policy of desolate old-age provision.
That pretty much affects the entire industry.
As an industry leader, however, it has always had a special role and sets standards.
And the benchmark for future contracts is now the guaranteed loss.
Allianz shows how it is done.
PS: Of course it could be that there could be a little surplus participation again at some point in the future or that the contracts run a little better with a little equity investment and bring in more than just a guarantee.
But to do this, this investment would have to run well again and there would have to be managers on the boards who want to be nice to customers and then actually grant a fair profit sharing.
I just lack faith.
This industry has miscalculated too brutally and fleeced its customers too brutally to expect a change of direction.
Axel Kleinlein is head of the Association of Insured Persons (BdV), Germany's largest consumer protection organization for insured persons, and
a member of the
opinion
makers of manager-magazin.de.
Nevertheless, this column does not necessarily reflect the opinion of the editorial team of manager magazin.