Allianz on Retirement Planning: 'Safety Is More Than Just a Guarantee'
You're planning for retirement, but the financial landscape has changed. Persistently low interest rates have made the traditional model of 100% capital-guaranteed pension products nearly impossible to offer while generating meaningful returns. So, what's the alternative? According to Laura Gersch, Board Member for Corporate Clients at Allianz Lebensversicherung AG, the answer lies in redefining safety itself. In an exclusive interview, she explains why Allianz is decisively moving towards alternative guarantee forms and flexible investment strategies. This shift isn't about taking away security; it's about building a more robust, realistic form of it for the modern era. If you're concerned about your retirement planning or occupational pension (bAV), understanding this evolution is crucial. Let's explore how leading insurers are navigating the low-yield challenge and what it means for your future financial security.
The Low-Yield Challenge: Why 100% Guarantees Are No Longer Sustainable
The core dilemma for life insurers and pension savers is stark: how to generate attractive returns in a world where safe, interest-bearing bonds yield very little. Sticking to rigid, full capital guarantees forces insurers into ultra-conservative investments, virtually guaranteeing that returns will lag behind inflation, eroding purchasing power over time.
Laura Gersch states clearly: "Low interest rates are here to stay for a long time. Therefore, we need freedom in capital investment to be able to generate attractive returns." This necessity comes at the expense of the traditional 100% contribution guarantee. The critical question is: are customers ready for this change?
Redefining Safety: What Modern Pension Savers Really Want
According to Allianz's research, the answer is a resounding yes. Customer expectations are evolving. Gersch explains: "For customers, safety is much more than a contribution guarantee. It includes diversified capital investment, innovative products, and also strong security assets."
This broader definition of safety is what Allianz aims to champion under the concept of "Safety with contemporary guarantees." Data supports this shift:
- Customer Survey 2021: Two-thirds of Allianz customers now prefer adjusted guarantees over a rigid 100% guarantee.
- Behavioral Shift: In one of their flexible products (InvestFlex), the share of customers choosing the full guarantee dropped from 75% five years ago to just 25% in 2020.
This indicates a growing clientele that understands the trade-off and is willing to accept slightly lower guarantee levels for the chance of higher long-term returns through diversified portfolios that can include equities and other assets.
The Strategic Shift: Phasing Out Rigid Guarantees
Allianz is implementing this philosophy decisively. Gersch confirms: "In the future, Allianz Leben will only offer the 100% contribution guarantee where the legislator requires it. Everywhere else, we will no longer offer it."
This means for most new pension insurance and retirement savings contracts, customers will encounter products with dynamic or partial guarantees. The insurer's subsidiary, Allvest, which targets digitally-savvy customers, has already launched with a product free from traditional guarantees, reflecting this new reality.
Implications for Occupational Pensions (bAV)
The changing product philosophy also affects the corporate world. Allianz recently announced it would stop accepting new business for its Pensionskasse (pension fund) from 2022, citing a strong decline in demand. Gersch notes that direct insurance (Direktversicherung) and Pensionsfonds have become more attractive due to their better return potential.
While the German Company Pension Act (BRSG) provided a broad framework for growth, specific models like the Sozialpartnermodell (social partner model) are slow to take off, as tariff parties have other priorities to resolve first.
The Future: Digital Advice and Awaiting Reform
The interview also highlights broader trends:
- Digitalization: The pandemic accelerated the demand for digital advisory services, a trend Allianz continues to expand.
- Riester Reform: Hopes remain that a long-awaited reform of the Riester pension scheme will be passed in the current legislative period, though the timeline is uncertain.
Conclusion: A Necessary Evolution for Retirement Security
Allianz's stance reflects a necessary industry-wide evolution. The promise of absolute capital safety with high returns was a product of a different economic era. Today's retirement planning requires a more nuanced approach where safety is a multi-faceted concept built on diversification, strong insurer fundamentals, and flexible product design that can navigate volatile markets. As a saver, this means engaging more deeply with your pension products, understanding the new guarantee structures, and potentially adjusting your risk-return expectations to secure a viable income in retirement. The era of passive saving with ironclad guarantees is over; the era of active, informed retirement planning has begun.