The Impact of Guarantees on the Performance of Pension Saving Schemes: Insights from the Literature

Risks

Alexander Bohnert¹ 

[1] Department of Insurance Economics and Risk Management, Friedrich-Alexander University Erlangen-Nürnberg (FAU), Lange Gasse 20, 90403 Nürnberg, Germany; E-Mail

关键词: life insurance;    pension saving schemes;    guarantees;    performance;   

DOI  :  10.3390/risks3040515

来源: mdpi

【 摘 要 】

Guarantees are often seen as the key characteristics of pension saving products, but securing them can become costly and is of central relevance especially in the course of the current low interest rate environment. In this article, we deal with the question of how costly the typical types of guarantees are, in the sense that they reduce a pension saving scheme’s financial performance over time. In this context, we aim to provide a presentation of insights from selected literature studying the impact of point-to-point guarantees and cliquet-style interest rate guarantees on the performance of pension contracts. The comparative analysis emphasizes that, in most cases, guarantee costs are not negligible with regard to a contract’s financial performance, especially compared to benchmarks, and that customers knowingly opt for such guarantees (or not) is, thus, indispensable. To further investigate the willingness-to-pay for guarantees in life insurance is an area for future research, in particular for innovative contract design.

【 授权许可】

CC BY   
© 2015 by the authors; licensee MDPI, Basel, Switzerland.