EUROPE - As some continental European markets edge closer to adopting funded pension schemes, unit-linked products are capturing increasing attention, according to a report from Cerulli Associates.
“It’s recognised in Europe that the state cannot provide for pensions in the way that it has in the past, and there’s going to be the need for greater self reliance on the part of individuals,” said Stephen Irving, senior analyst and consultant, Cerulli Associates.
The combination of an investment fund with an insurance policy is a logical step in increasing confidence in complementary pensions schemes in Europe, where insurance products have long been popular investment vehicles.
“In many countries, particularly in Germany, people are very comfortable with insurance products, and going from a strictly insurance product to one that is an insurance product that invests in underlying funds, is not such a great leap,” said Irving.
Cerulli argues that Europe’s pension reform will take place in the third pillar, not the second, with individual insurance products likely to form an increasing component of pooled pension assets.
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