Consumers well, but not perfectly informed

Is my money well and safely invested in private retirement provision? Once a year, life insurers inform their customers about the development of the policy. There has been some progress here.

Since summer 2018, insured persons have the right to be better informed about the development of their life insurance.

Mor more insight into private old-age provision: According to a study, consumers are now receiving more and better information about the development of their life insurance. According to a study by Policen Direkt, the majority of German life insurers have revised their annual customer information and meet the new minimum requirements that have been in force since summer 2018. Initial experiences from consumer advocates are also positive.

“Our first impression: There are significant improvements,” reports Sandra Klug, market watchdog for insurance at the Hamburg consumer center. “The information is clearer and easier for consumers to filter out.” With some insurance companies, however, there are still problems.

According to the consumer advocate, a life insurance company has informed its customers that they will initially not receive a so-called status notification for 2018. Another company did not fully provide the required values.

21 insurance companies offer more information than required by law

“We have written to the companies and are waiting for explanations,” said Klug. One reason could be problems when converting the software to the new specifications. In an initial analysis, the consumer advocates took a closer look at the reports from around 15 of the total of 84 life insurers.

According to Henning Kühl, chief actuary at Policen Direkt, the proliferation of stand notifications has not yet been completely eradicated, “but customers clearly benefit from the often more extensive information”. According to him, 60 of the 73 life insurers examined fully meet the new statutory minimum requirements.

Information about the benefits in the event of death and the amount that will be paid after the contract expires unchanged is mandatory. The amount that the insured would receive if no further contributions were paid must also be stated, as well as the current surrender value of the contract. Customers who have taken out a new policy must also be informed of the premiums paid. Existing customers can receive these on request.

According to the study, 21 insurance companies offered additional information beyond the minimum legal requirements. This would enable customers to better understand changes compared to the previous year, said Kühl. Policen Direkt buys existing life insurance contracts from customers and continues them until they expire.

Customers can complain to the financial supervisory authority Bafin

For the study, customer information on classic capital-forming life insurance policies was evaluated, in which the sum insured is paid out in the event of death or after the contract has expired.

Before the new regulation, the customer information, which is often sent at the turn of the year, only had to contain the surpluses achieved so far. Consumers who wanted to know what their life insurance was worth had to ask the companies in some cases.

If insured persons have the impression that the letter from their insurance company does not comply with the legal requirements, they can complain to the financial supervisory authority Bafin. These notes are important for the authority in order to gain knowledge of deficiencies. However, the Bafin cannot make binding decisions on individual disputes. This is a matter for the courts.

Consumers can also turn to the market watchdogs at the consumer advice centers. “We contact the insurance company and issue a warning if necessary,” explains Klug. “Customers have an individual right to the information.”