Canada Life Germany CEO Markus Drews: “Anyone investing in the capital market for the long term doesn’t need any guarantees” – Cash.

Since the end of February, the economic environment, keywords record inflation, has become even more difficult. Is Canada Life still growing?

Drews: Yes, we are. Despite the challenging environment, we expect premium income to grow. In terms of new business, we’ve had a great start to the year. With a record in the first quarter. Then, of course, we felt the effects of the market situation and consumer uncertainty. We are currently slightly below last year’s level, which was great. We are happy with it. We are still the fastest growing part of the group in Germany.

Can you provide details?

Drews: We are stable in terms of regular installments. Superannuation or company pension schemes are doing very well. AKS is also in demand. Things aren’t going so well for lump sums. It has nothing to do with the market and nothing to do with us. However, in 2021 we had great single premium business in the fourth quarter. So we still have to work against the stats here.

Why are lump sums doing worse this year?

Drews: Last year, the environment was more attractive for many investors who wanted to invest. People are thinking twice about investing this year. With high energy prices, the wait is completely understandable. If you look specifically at new business, you can already see consumer uncertainty.

How does the general economic climate affect retirement provision?

Drews: The “war for talent” in Germany is very visible in corporate pension systems. Employee safety is also important to people. Just like long-term savings for lifetime income. We conducted the survey with Civey because we were interested in the impact of inflation and the crisis on pensions. It turned out that people in Germany are more likely to save money when buying a house, renovating or going on vacation; but less for insurance. If you want to save there, then property insurance is optimized or changed in a short time.

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Did the result surprise you?

Drews: No. Most of our clients make a conscious decision to save for old age. And here the long term plays an important role. Car insurance is quickly taken out or changed. A reasonable provision of old age must be well informed. Despite the crisis, the aspect of longevity plays an important role here.

Industry representatives always emphasize that the statutory pension is not enough to provide for old age. But what about those who are affected? Do young people want to think about retirement right now? What are you listening to?

Drews: Our average customer is around 30 years old, but many already have insurance experience. Looking at sales associates who tend to deal with young people, it’s more difficult in private provision. In contrast, bAV works very well there. It does not depend on age, as the motivator is often the employer. There are now significantly more employer-sponsored company pension schemes than before.

Despite the crisis, does BAV work?

Ties: Of course. Again, I find it amazing. I was afraid that employers would hit the brakes, as they did at the beginning of the Corona pandemic. We don’t see the impact on us. Employers are literally standing on their hind legs to offer a reasonable baAV or bKV. The aim is to make the packages significantly more attractive to employees. Because there is a great need for qualified personnel everywhere. We mostly have our customers in the small and medium sector. We entered the business here through intermediaries. The segment is very important. We enroll about one third of new business in company pension systems. Also because we as an insurer have invested heavily in technology and corporate pension specialists in recent years.

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We have been living in a world of 0.25 percent guaranteed interest for eleven months now. Interest rates are now rising. Perhaps we are experiencing a classical music renaissance? And against the backdrop of zero-level guarantees: Do you still need guarantees?

Drews: I can’t imagine classical music coming back. Since the beginning of the year, we no longer have any guarantees above the premiums. And we’re fine with that. If we evaluate our experience with the ultimate warranty, which we have been offering here in Germany for more than 20 years: the safety net there has come down with the…

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