A stable, well-functioning financial market for allA stable, well-functioning financial market for allA changing pension market
The competition on the life insurance market is increasing. The pensions based on collective bargaining constitute an increasing share of the total life insurance market. Changed tax regulations are affecting motives and opportunities to take out insurance or supplement private insurances. Other types of investment are challenging life insurance companies and that creates new insurance products with a limited insurance element. FI has surveyed the procurement of supplementary pensions for salaried employees and analysed risks that procurements can entail for a changing pension market.
The procurement of supplementary pensions for salaried employees can reduce the fees for pensioners by more than 50 per cent.* Lower fees for pensioners reduce the pension companies' revenues. This can lead to weakened profitability which makes demands on the companies' ability to adjust and how they manage the conflicts of interest which can arise.
We want to call attention to the fact that the pension companies have several problems to manage in their compliance with regulations and internal guidelines. Several areas are mentioned in the report, for example, the creation and financing of new products and which conditions apply for the transfer of pension capital. The corporate management and board of directors have the responsibility and shall be able to demonstrate how they act in order to minimise the risk of conflicts of interest.
*We have chosen to consistently use the term pensioners in the report; the concept of policyholders refers here to the employer and the term insured is not as clear.
