E.Another heavyweight of the German life insurance market is saying goodbye to the business of classic policies with annual interest guarantees. On Thursday, R + V, one of the providers with the highest contributions on the German market, announced its departure from the product. In new contracts from January onwards, a maximum of 90 percent of the contributions would be guaranteed as capital at the start of retirement.
R + V is also adapting its product range to the low interest rates and the demand for products with a higher investment risk. “With the revised product range, we are precisely meeting the needs of our customers,” said Claudia Andersch, CEO of R + V Lebensversicherung, as quoted. The trend towards more profit-oriented products will continue.
R + V from Wiesbaden belongs to the cooperative association with the Volks- und Raiffeisenbanken and had held on to guarantees longer than competitors. In particular, the strong business with company pension schemes, in which contribution guarantees were mandatory for a long time, was decisive.
The guarantees have been popular with employers and customers because they provide security. The lower the interest rates, however, the more assets have to be invested in low-interest securities and the less remains for equity investments, for example. R + V has now lowered the current interest rate to 1.75 percent. Existing policies will continue to be served with a guarantee and profit sharing.