The number of contracts for a “state-sponsored retirement provision” showed a year-on-year increase of 4.8% to roughly 1.6 million contracts by the end of 2011. At €1.1 billion, the volume of earned premiums or net premium payments was +0.5% higher than in the previous year, while the assets managed rose by +14.4% to slightly over €5 billion. The volume-weighted performance amounted to -2.9% in 2011 (4.7% in 2010). The news was disclosed in “State-Sponsored Retirement Provision in 2011”, an annual study published today by the Financial Market Authority FMA.
As in previous years, the insurance undertakings were able to further expand their dominant position in the state-sponsored retirement provision market. They managed to increase the number of contracts by 5.1% to about 1.5 million, giving them a market share of 92.7%. In the case of investment fund management companies, the number of contracts fell slightly by -0.1% to about 118,000, accounting for a market share of 7.3%. The average annual premium in 2011 was €624 for insurance undertakings (€644 in 2010) and €699 for investment fund management companies (€782 in 2010).
The performance of state-sponsored retirement provision schemes varied greatly during the year reported on. At 1.7%, investment fund management companies (volume-weighted) did clearly better than insurance undertakings, where performance stood at -3.3%. This is mainly due to the fact that products with stop loss orders in particular showed better performance. In the case of products with stop loss orders, the amount of assets invested in shares of stock was reduced completely, so that the accelerated downward slide in the stock markets was no longer reflected in the performance for the entire year. In 2011, a total of about 56,000 contracts were reported as having been stopped out, which is equal to roughly 3.5% of all contracts or 5.7% of total managed assets. About 20% of contracts with investment fund management companies and 2% with insurance undertakings were reported as having been stopped out.
There were 650,000 contracts (700,000 in 2010) with a low effective share ratio (i.e. below 10%), or 40% of all valid contracts as of 31 December 2011 (45% in 2010). The assets managed within these contracts amounted to slightly more than €2.4 billion, or roughly 43% of the total current assets under management. Of the total managed assets, 37.7% was reported as being invested in contracts having a very small effective share ratio, i.e. in contracts not reported as having been stopped out with an effective share ratio of less than 2%.
Contracts for state-sponsored retirement provision run for a term of at least ten years. Investment fund management companies currently offer only ten-year contracts, while insurance undertakings also offer contracts with considerably longer terms. At the end of 2011, more than two thirds of the contracts had terms of 25 years or more, and one fifth were actually running for more than 45 years.
The complete study is available on the FMA website (in German) at https://www.fma.gv.at/publikationen/studie-praemienbeguenstigte-zukunftsvorsorge/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0)676/882 49 516