In this article, I explore some of the reasons behind this by examining the parallels and differences between the Netherlands and my home country, the United Kingdom in order to understand the strengths and challenges that face the life insurance industry here in the Netherlands.
PARALLELS
The Dutch and British life insurance markets are remarkably similar. With a life expectancy at birth in 2018 of 81.8 and 81.32 respectively, both the Netherlands and the United Kingdom face the challenge of increasing longevity on our societies. Besides this, record low interest rates and stricter solvency requirements have seen insurers on both sides of the channel withdrawing from the sale of risky products (such as endowment assurances) and instead offering more and more products in which risk is transferred to the policyholder (such as investment annuities). The trend of employers changing from a Defined Benefit (DB) pension plan to a Defined Contribution (DC) pension plan can be seen. With the ‘New Pension Contract’ in the Netherlands, as part of the reform of the Dutch pension system, this trend looks set to catch up with the UK, where very few private sector DB schemes remain open to new members or accrual.
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