Old-age provision
Developing awareness of the problems is stimulating sales
With its traditional core competency of old-age provision, MLP is operating in a growth segment in Germany. Numerous market research studies have proven that there is now clearly willingness among the German population to provide for their own old age. This generally improves the situation for the financial services sector. However, most citizens consider the three-stage old-age provision system in Germany too complicated. In our opinion, this means that those financial services providers that can offer their clients a requirements-based analysis and sound advice are likely to find the most favour among potential clients. Consequently, our holistic consulting approach opens up long-term potential with diverse cross-selling opportunities.
Expected pension level in selected countries (in %)*
The old-age provision market in Germany is not even close to being fully tapped. To date, only around 12 million clients have signed Riester agreements, and experts suggest that the total potential here is three times this volume. Added to this is the fact that the legislator last year expanded Riester subsidies to include residential property, which should further increase the number of people keen to sign up. MLP regularly informs its clients of the opportunities offered by Riester savings and is able to record long-term growth among the agreements due to the high quality of its comprehensive consulting approach.
Rürup pension increasingly attractive
We also expect the Rürup pension to soon see greater sales as another form of taxprivileged old-age provision. Although German savers have been slow in warming to the Rürup pension, it does represent an interesting provision option for a broad range of the population. Indeed, it has become significantly more attractive since being introduced in 2005, as the insurance industry has used this time to work on new, innovative product offers.
Development of number of Riester contracts by type of policy
There are also interesting product innovations in the third stage of the old-age provision system. The industry sees good market prospects for the so-called “variable annuity policies” that have already enjoyed success in the US and parts of Europe. With these products, the security of life insurance is combined with the opportunities and risks of the capital market. The insurance industry is working on gaining approval for corresponding products for the German market. As the annuity policies are interesting old-age provision products but require explanation to clients, they also offer MLP corresponding consulting potential.
Occupational pension provision increasingly in the focus of mid-sized companies
Occupational pension provision is one of the most important building blocks in the German old-age provision system. While around 64 % of employees subject to social insurance contributions in Germany already have a supplementary company pension, the concept is only now being established among mid-sized companies. As such, there is massive potential here. Alongside its existing occupational pension provision operations, MLP also has excellent opportunities in the fields of provision solutions for leading trade associations, mid-sized companies and concepts such as lifetime working accounts.
The complexity of the material requires high-grade consulting for associations, employers and also employees in the long-term – especially since MLP’s target groups have greater old-age provision requirements due to their comparably good income situation.