Insurers in Europe are invading the home turf of pension
companies, according to research house Cerulli.
Analysts at the firm claim insurers in the Netherlands,
Sweden and the UK are expanding into pensions provision due to
growing pressure from unaffordable historical guarantees on
Dutch insurers have been the earliest adopters of the
Algemeen Pensioenfonds (APF), one of the country's prominent
vehicles for workplace pensions. AEGON won approval from De
Nederlandsche Bank for one over the summer.
Rival insurers aspiring to have their own included Achmea,
ASR, Centraal Beheer, Delta Lloyd, and
In Sweden, branching into occupational pensions business
offers insurers a welcome diversification of business.
Their regulator, Finansinspektionen, has boosted the
attraction of such diversification until the end of 2019, by
subjecting it to Solvency I, rather than to the more capital
absorptive and generally stricter Solvency II.
In the UK, Cerulli finds that composite insurers are
extending their activities in occupational pensions, in part to
plug gaps left by a softening of individual life annuity sales
since annuitization became optional for retirees in April
"Pensions business offers insurers recurring income for
generally less onerous capital implications than those that
come with traditional insurance products. There is also the
attraction of diversification," said Justina Deveikyte, senior
analyst at Cerulli Associates.
"For some insurers in the Netherlands, Sweden, and the
United Kingdom, the temptation is proving too great,"
Cerulli’s experts reckon it is too early in
some cases to tell whether insurers' expansionist tendencies
will broaden or narrow opportunities for independent managers
to run pension assets.
It notes, however, that the largest insurers--companies that
tend to own in-house asset managers--are generally better
placed to expand into pensions provision.
"That said, governance standards and the stipulations of
pensions themselves should ensure not all asset management is
brought in-house," added Deveikyte.
"As long as doing insurance business remains
tough, Cerulli expects Europe's €8.4trn
(US$9.4trn) industry to see workplace pensions as a useful
'Plan B' to run in parallel to its mainstay."