The Dutch central bank will publish a new report on Wednesday which shows the market for life insurance policies threatens to disappear, the Financieele Dagblad reports.
Life insurance was once responsible for almost half of the sector’s revenue from premiums, the report shows. In 2007, for example, individual life insurance policies accounted for premiums of €18bn out of total revenues of €39bn. By last year, however, this had halved to €9bn.
The central bank has now told the big insurance companies to come up with plans to offset the reduction. ‘The sense of urgency has not yet been felt everywhere,’ Thijs van Woerden, who is head of the central bank’s insurance sector regulation, told the Financieele Dagblad.
While the bank does not say insurance companies should cut their workforces, ‘they have to show they can cope with the reduction’, Van Woerden said. Some 52,000 people currently work for an insurance company.
The central bank expects the trend to continue and that revenue from life insurance premiums will be as little as €3bn by 2030.
The life insurance sector is under pressure from other forms of savings which generate better returns and the poor reputation of investment-related insurance polices following a string of scandals over high charges.
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