Expanded count of bAV contracts reaches 16.38 million.
The growth trajectory of occupational pension provision (bAV) among life insurers in Germany is showing signs of expansion, as ongoing reforms aim to broaden coverage and improve funding, particularly in direct insurance and occupational pension funds.
According to the latest data from the industry association GDV's publication "Life Insurance in Figures", the number of occupational pension contracts provided by Germany's life insurers increased by 0.8% last year, reaching 16.38 million. This growth comes as approximately 18.1 million employees were entitled to a company pension from their current employer, indicating significant penetration of occupational pensions in the workforce.
Growth efforts are focusing on extending occupational pension schemes to small and medium-sized enterprises (SMEs) and boosting participation through defined contribution (DC) schemes under the social partner model and expanding automatic enrolment. The draft reform legislation plans to increase tax-free maximum contributions for direct insurance and pension funds from €960 to €1,200 per year, and enhance subsidies for low-income employees to encourage employer contributions.
However, industry bodies express disappointment that the legislation falls short in some aspects, such as the narrow scope of auto-enrolment and insufficient tax incentives for low earners, which could limit growth impact.
Regarding current numbers and growth rates, the life segment shows slight reductions in gross written premiums in some areas but increased life net inflows in Germany specifically, with a net inflow increase of 73.8% in the traditional saving line, which often includes occupational pensions. The annual running contribution for funding contracts, such as from direct promises or support funds, currently stands at 3.6 million, representing a 1.8% increase. The annual running contribution for direct insurances amounts to 8.3 billion euros.
Life insurers see growth in net contributions, particularly in traditional saving lines related to bAV, but further legislative enhancements may be needed to unlock full growth potential, especially among smaller employers and low-income employees. The growth of occupational pensions (bAV) in Germany is supported by these reforms, but additional measures may be required to ensure comprehensive coverage and optimal funding for employees.
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