German insurer shocked? but not the Swiss
As the largest life insurer, Allianz shocked the Germans: There should no longer be any guarantee of premiums paid! What caused an outcry among the people in the northern neighbors has long been so in Switzerland and is no longer even worth asking. There are no lifelong guarantees on contributions and interest here anyway, and that is how it should be for life insurances in Germany in the future.
After the savings phase has ended, there is no longer any guarantee that at least the contributions paid will be paid out. The regulation affects all new Allianz customers and is intended for both life and pension insurance. Only 60, 80 or 90 percent of the contributions paid up to then are guaranteed.
In Germany one speaks of breaking a taboo, but in Switzerland insurers have been acting in this way for a long time. The reason is simply that the phase of low interest rates has lasted for so long and insurers can no longer make a profit with commitments on premiums and high interest rates . Changes in the pension market have been noticeable since 2015, as the Swiss Allianz subsidiary? Allianz Suisse? The product range has therefore been adapted and the guarantees are only given between 50 and 90 percent. Gone are the days when up to four or even five percent interest could be collected without any risk.
Other insurers are also going this way
Various insurers in Switzerland state that life insurance is definitely a challenge that, under the prevailing conditions on the capital market, is no longer possible at the previously promised attractive returns. Gross premiums can no longer be guaranteed and this is not a new feature.
This regulation is an advantage for the insurer as, thanks to the lower guarantees, he can gain more leeway, especially in the case of risky asset classes. He invests the money more in stocks and similarly more volatile investments, which have a higher risk of loss, but at the same time also offer better potential for returns.
The customers in Switzerland don't mind, they are used to it now. The classic life insurance of yore has long ceased to exist here, even if it was not an issue in Germany until recently to act in this way. It was clear to experts that things couldn't go well there for long either.
In Switzerland, mixed life insurance in the third pillar is the most common form. On the one hand, savings are made here for old-age provision, on the other hand, death and disability are to be covered as the greatest risks. The focus is on protecting the bereaved, saving and risk protection should be combined.
However, this has been viewed critically for years, because the products are only flexible to a limited extent and the associated life insurance policies are not very transparent. In addition, the customer has to determine how he wants to use the service in the future at the conclusion of the contract, which is hardly possible since nobody knows his life situation in a few years.
Conclusion: life insurance is not guaranteed
Even if the German neighbors stomp outraged and complain to Allianz: Life insurance, as it used to be, will no longer exist thanks to the ongoing low interest rates. The insurers no longer take any major risks and cover a maximum of 60 to 90 percent of the premiums.
For the insured, however, this means that in the worst case scenario, they will incur losses and not even get back the contributions they have paid in. In Switzerland, however, this is no surprise, where insurers have long been operating in this way.
