The company is one of the medium-sized German life insurers.
(Photo: dpa)
Munich The Dortmund-based insurer Signal Iduna is founding a new life insurer with a sustainable focus. Signal Iduna Lebensversicherung AG, which is suspended below the group holding company, will go on the market from next year. The new business of the traditional company will then run entirely through this subsidiary. The previous Signal Iduna life insurance a. G. should then be primarily responsible for existing contracts. The company announced on Wednesday.
Signal Iduna is one of the medium-sized providers in the German life insurance market. Around 1.5 million customers have so far concluded their old-age provision contracts there. The new Lebensversicherung AG is to accelerate the growth of the group primarily by focusing on sustainability and digitization, according to the plan of CEO Ulrich Leitermann.
Switching over to a new company is easier than quickly switching over a portfolio that has existed for many years. There, as for the whole group, the path to climate neutrality is planned by the year 2040. The new company, which begins with contract number one on January 1st, has the freedom of a newcomer without the previous legacy.
Signal Iduna is under pressure from the central banks’ long-term low interest rate policy and the burden of high-interest old contracts. According to an evaluation by Policendirekt, the solvency rate, which indicates the ratio of existing to required equity, was at Signal Iduna Lebensversicherung a. G. for 2020 at rock solid 330 percent.
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However, this was only the case if volatility adjustments and transitional measures are taken into account. The pure solvency ratio was only 33 percent – Signal Iduna was one of the weaker providers on the market.
Bad rating from experts
In a current study of the twelve largest insurance associations by Professor Hermann Weinmann from Ludwigshafen for the magazine for insurance (ZfV), the results are comparatively poor. “Without transitional regulations and volatility adjustments, Signal Iduna will find it difficult to equip its own funds,” it says.
As an internal run-off – i.e. as the freezing of old portfolios and the restart with policies in line with the market – Signal Iduna does not want the step to be understood. One can imagine that products such as company pension schemes will continue to run through the old company in the future. The fact is, however: In the previous company, the number of contracts is likely to shrink over the years, while the new company will grow strongly from day one.
According to Signal Iduna, it is important to put sustainability first with the new company. Competitors are also following this trend. “We are seeing that more and more customers are turning to sustainable investments when it comes to capital investments,” said Zurich Germany boss Carsten Schildknecht recently.
More: Model Spotify: Signal Iduna is going from a tradesman’s insurance to an agile group