Life assurance

With the collective term British life insurance a variety of life insurance and annuity products is referred to, which are typically offered by insurance companies based in the United Kingdom and in the Anglo-Saxon area. As part of the European single market for insurance, these products can also be offered to citizens of other EU Member States, either directly from the UK or from a branch of the insurer in the Member States concerned.

British life insurance market

The UK life insurance market has existed for over 200 years. He has a share of about 18 percent in the European insurance market, making it the largest market segment in Europe and the third largest in the world. The companies manage a total of around 1,092 billion British pounds and pay 247 million British pounds in benefits ( pension benefits, life insurance claims ) per day and keep as institutional investors about 20 per cent of UK equities. The contracts are usually concluded for the purpose of investment, private pension or to secure a loan. In the UK life insurance market endowment life insurance with the British form of profit sharing are ( With- profit endowment ) or many unit-linked life insurance policies offered. In recent years, complex mixed forms always take more.

Equity investment and smoothing of results

The main difference between a British and most continental European insurers is the investment policy. Because of European regulations the legal requirements are indeed largely the same in all Member States of the EU. However, most continental European life insurers offer relatively high guaranteed maturity benefits. In some countries, such as Germany from 2008, must also surrender values ​​of all providers, including by UK insurers, during the term of the amount of guarantee. British life insurance policies provide only relatively low guarantees and this even to the end. Surrender values ​​are usually not guaranteed. This gives the UK life insurers a much greater flexibility in the investment, and they can invest as stocks in highly volatile investments therefore much larger scale, but always within the framework of the European-wide ceiling of 35 % of total investments. In the context of unit-linked life insurance, the investment in the Fund prospectus is free.

Because of this policy, individual British life insurers have achieved relatively high investment returns, some of which benefit the policyholders under the discretionary participation feature. But the results of such investment are very volatile and unpredictable. Especially with short maturities, in times of economic share some British life insurers have significantly higher returns for policyholders generates, as a traditional continental Europe. On the other hand, there were also the insurer with much poorer results. For contracts with the usual in Germany long durations of two to three decades, or even longer, the temporary results of volatile investments from the same though, but is often the capital market development in recent years of the contract for the overall results significantly. There is no evidence that it is possible in this way likely to achieve better long-term results, as the safety and product reliability oriented continental European approach.

The British form of profit sharing causes, as elsewhere in continental Europe often common to a certain smoothing ( " Smoothing " ) the volatility of investment income, but clearly at the expense of causing justice. Peaks are not distributed but returned and used in particularly bad years, especially for competitive reasons for the improvement. In determining the dividends to policyholders British Insurers have one in continental Europe legally barely imaginable discretion.

Cost structure

The essential details of the insurance contract must also in UK life insurers under EU law the customers already are informed before conclusion of contract: investment process of the funds, insurance terms, contract law, not to the system envisaged deductions on contributions and risks. Also in UK life insurers customers are submitted in advance without obligation illustration and model calculations, in which fictional performances calculated on the basis of different growth scenarios after all deductions are set forth from the contributions. In particular, this is for the client to identify which yield must be achieved, so that the system compensates for the prints back from the post. The but not guaranteed surrender values ​​take into account the initially incurred acquisition costs not immediately at the beginning, but distribute them as in some continental European countries, Germany in 2008, over 5 years.

Bankruptcy Protection Fund

In addition to the British Insurance Supervisory Authority ( FSA), the legal basis for the protection of investors in the event of an insurance insolvency was in 1974 with the " Policyholder Protection Act" created. The British fire service fund is now regarded also for investors who are not resident in the UK ( limited to the EU). Participation in the Protection Fund FSCS " Financial Services Compensation Scheme " is mandatory for British insurance and covers in the event of insolvency, 90 % of the contract value ( including the existing surpluses ) from. Insurance companies that have their head not in the UK but offer life insurance British style, do not belong to the security fund FSCS. This is particularly true for the company pension is an important aspect. To assess the insolvency protection is also always the respective financial strength of the Anglo-American companies to consider, since ratings usually only for the main group and not for the associated branch in Germany, which can be a stand-alone company, apply. Here the customer can help in advance of a bankruptcy only guarantee statements of the parent company.

Provider

Among the best known providers in the German market include:

• Canada Life ( not a British insurer, but provides policies to British style )
• Clerical Medical
• Legal & General
• Sali (since the beginning of 2004 by Canada Life acquired )
• Standard Life
• Royal London
• MGM
• Friends Provident

• Economics (United Kingdom)
• Retirement
• Insurance Law
• Law ( United Kingdom)