Highest pension returns offered in 2021
In a comprehensive evaluation of 629 pension plans, rating agency Franke and Bornberg has found a promising outlook for capital-based retirement provision. The agency analysed the plans based on 64 criteria, drawing from a variety of data sources such as insurance policies, binding consumer information, application forms, insurance certificates, and business reports. Self-disclosures and marketing texts were excluded from the data sources.
The guarantee-oriented hybrid concept, in particular, showed strong performance. Around 18% of these plans received the top note of FFF+, with about 72% receiving an FFF. In contrast, classical plans appeared to lag behind, with only one of the 62 examined plans receiving the top rating, and just over a quarter of private classic plans receiving an FFF.
The agency's analysis also revealed that over half (362) of the plans were private insurances from the third tier. Experts have categorized these plans into five product categories. The performance density was high, with many insurers having done their homework and their innovative plans holding their own in a low-interest environment.
Of the 629 analysed plans, nearly 25% received the top rating of FFF+. This is the first time Franke and Bornberg has evaluated the financial strength of insurers in their testing procedure. The Map-Report, titled "Balance Sheet Analysis of German Life Insurers," was used for measuring financial strength. This report is expected to be published at the end of October this year.
CEO Michael Franke initiated the criterion for evaluating the financial strength of insurers due to the decline in interest rates. The agency uses the test rating from the Map-Report for this purpose. Franke and Bornberg assesses the financial strength of insurers based on several criteria, including the quality of insurance conditions, the evaluation of risk protection and contribution levels, as well as individual and needs-based protection. However, concrete financial evaluation metrics or specific criteria are not detailed in the available search results.
Only 33 companies still offer a classical plan. This analysis by Franke and Bornberg provides valuable insights into the current state of pension plans and offers a positive outlook for capital-based retirement provision.
