The Austrian Financial Market Authority’s (FMA) annual study on state-sponsored retirement provision (PZV; Prämienbegünstigte Zukunftsvorsorge) shows a further reduction in new business and therefore confirms the trend that has prevailed for many years. The number of new contracts in 2017 stood at 14,457, 22 % lower than in the preceding year (2016: 18,474). Of the 22 undertakings active in the PZV market only seven still conduct new business. More than half of the premium volume is managed by undertakings that no long conduct new business and only collect premiums from existing contracts.
The volume of earned premiums continues to fall also for new business. In total the net inflows fell by 5.7 % to € 862.2 million. In the case of insurance undertakings the premium volume fell by 5.3 %, whilst it decreased by 25.4 % in the case of investment fund management companies (KAGs).
Such KAGs have withdrawn from conducting new business in 2010, with the contracts that they manage therefore increasingly maturing. The number of contracts that they managed also reduced accordingly by 35%. Insurance undertakings also posted a decrease of 5.9 %. In total 1,289,833 PZV contracts were still under management in 2017 (a 6.9 % decrease compared to 2016).
In a favourable stock market environment the investment performance (weighted by volume) on the total capital before costs invested in PZV was +9.6 %, having been +5.8 % in 2016. Driven by this investment performance the assets under management in PZV increased by 6.5% to € 8.9 billion in 2017. In insurance undertakings which hold a 98% share of the assets under management, the volume increased by 7.5 % to € 8.8 billion, while investment fund management companies posts a decrease by -30 % to € 164 million.
The costs of PZV is measured in terms of the calculated premium. Depending on the provider that stand at between 6 and 10.5 %. On average, for products with a 20 year term, they are 8.2 %, and in the case of those with a 30 year term 9.6 % of the calculated premium amount.
Market concentration continues to be high. The cumulative market share of the top three providers in the insurance industry in terms of net premium volume stands at 55 %.
The study can be found (in German only) at:
https://www.fma.gv.at/publikationen/studie-praemienbeguenstigte-zukunftsvorsorge/
Journalists may address further enquiries to:
Stefan Maier
+43/(0)1/24959-6001
+43/(0)676/882 49 426