20 Years of Arnoldshain Seminar
“20 Years of Challenges for Integration, Globalization, and Development”
September 14 – 18, 2015
Frankfurt and Arnoldshain / Taunus

Wondrak, Carola    
AbstracttitleImpacts of demographic changes on German life insurance
ShortabstractOngoing discussions concerning problems in life insurance focus on the low yield environment and the problems caused by the new regulation, Solvency II, which demands for a much higher equity stake to secure payments. With these threats, the governmental retirement system cannot secure payments high enough in future times and also company pension plans experience problems with the resulting pension gapsi. A problem that separates the 87 German life insurance companies from the other European life insurers is the aging of the population living in Germany. The pension plans are financed by the contributions of the working population. With people having better conditions, people age better, have the risk of longlivety and not enough people to be born to finance the retiring cohort. The focus on people who already have a life insurance contract is now to use it as a retirement savings plan. Currently, there are more life insurance contracts signed than Germans. This means that the current population (that values savings and is able to save) holds more than one contract. A second impact of the new born cohort is that fewer life insurance contracts are sold. Hence, the amount of life insurance contracts is growing out. Therefore, three research questions can be asked: 1) How is the system of German life insurance built? 2) How is it affected by the German population? (low yields, search for security, values, aging population) 3) What way are there to solve the problem? This paper tries to evaluate the problems and derive solutions as well as giving a brief introduction on the life insurance market in Germany, an analysis of the news flow and a brief overview of ongoing mergers that are caused by consolidation in that market.