ERGO life insurers adjust overall rate of return

ERGO Vorsorge Leben, the ERGO Group’s life insurance provider, is adjusting its current overall rate of return for 2022. Similarly, ERGO Leben and Victoria Leben, the two companies responsible for traditional life insurance products, are to adjust their overall rates of return from last year. 

“In light of persistently low interest rates, the ERGO life insurance companies will make a slight downward adjustment to the profit sharing for 2022,” says Michael Fauser, Chair of the Board of Management of ERGO Vorsorge Lebensversicherung AG. “ERGO remains a reliable and financially strong partner for its customers,” he stressed. “This is again underlined by ERGO Vorsorge’s high solvency ratio of 577%, which is exceptionally high when compared with the market average, and by its best ever and recently confirmed credit rating of AA from rating agency Assekurata.”

Total rates of return in detail:

ERGO Vorsorge Leben: ERGO Vorsorge Lebensversicherung will be setting a current interest rate for 2022 of 2.2%. Added to this will be 0.2% from the terminal bonus and the basic share in valuation reserves. This brings the overall rate to 2.4%.

ERGO Leben: ERGO Lebensversicherung will be setting a current interest rate for 2022 of 1.85%. Added to this will be 0.25% from the terminal bonus and the basic share in valuation reserves. This brings the overall rate to 2.1%.

Victoria Leben: The current interest rate for 2022 at Victoria Leben will be 1.85%. Customers will also receive 0.25% from the terminal bonus and their basic share of the valuation reserves. The overall return is thus 2.1%.

Sustainable investment strategy
At its life insurance companies, ERGO continues to follow an optimal investment strategy that is tailored to the business model in each case, in order to ensure a durable and attractive rate of interest by generating suitably high current income. As part of this strategy, ERGO is expanding its commitment to sustainable infrastructure financing in segments such as wind power, district heating and rail networks, and also in real estate financing. ERGO Vorsorge Leben is also making increased use of the return opportunities on the equity markets.

Background to overall rate of return
Each year, insurers calculate their earnings from investments and other profit sources. Their customers receive a share of the profits. At the end of each year, the insurers decide on the running yield and whether any maturity bonus will be paid out to their customers. Taken together, this constitutes the overall rate of return. In many policies, the bonus also includes a share of the valuation reserves.

Existing customers are paid at least the interest rate guaranteed at the time their policy was signed.

The distribution of the bonuses is reported by the insurers to the German Federal Financial Services Authority (BaFin).