New business in the financial security sector grows by 14% - market shares gained in the occupational disability sector and unit-linked products.
In 2008 the Wiesbaden-based financial services provider Delta Lloyd Deutschland AG began to reap the benefits of its product offensive and built on its market position in central product sectors, mainly as regards unit-linked products and occupational disability.
Overall, the company was able to increase new business in the financial security sector, the largest of the three business areas (financial security, assets and funding) by 14% to €111.5 million. Contributions remained stable at €437 million, despite difficult market conditions. Regular new contributions fell by three percent to €20.1 million. One-off contributions on the other hand increased by 18% to €91.4 million. The share of these not honoured has also seen a positive further decrease, standing at just 3.3% for 2008 (2007 4.2%). This is due to a high standard of new business. Assets under management fell to €5.6 million (2007: €6.2 million). This can primarily be attributed to regular maturities on life insurance contracts, as well as general market development. The large volume of capitalising contracts has also been reduced, in order to avoid dependency on individual partners.
Market shares gained in unit-linked products and occupational disability
Market shares were gained in the financial security sector mainly due to the outlined product focus. New business therefore increased by 18% for unit-linked products, whereas the market shows growth of only 12%. With its numerous strongly-performing products Delta Lloyd has established itself as one of the top providers and gained a larger share of the market. The development in long-term care insurance and occupational disability insurance is similarly positive. In this area Delta Lloyd has long been established as an expert and has set the standard with its long-term care tariffs as well as in occupational disability insurance with innovations such as tele-underwriting. Accordingly, regular new contributions in this sector increased by 24% in comparison to the previous year, whereas the market has had to acknowledge a decrease of four percent.
Demand for more secure financial investment
The development of regular new contributions in company pension schemes declined somewhat over the year as a whole. Yet, with an increase of 16% compared to the same period the previous year, year-end business from October showed the positive effects of extensive acquisition endeavours and that the revised products have been well-accepted on the market.
The Delta Lloyd "RenditePark" has progressed well; a secure and flexible choice for financial investment with interest of currently 3.75% guaranteed for a year. Delta Lloyd saw an increase of 118% in low-volume capitalisation deals and also stands well above the industry average of 35% growth. In the area of payment protection insurance, where Delta Lloyd is traditionally one of the leading providers, contributions increased by 21%.
New structure for investments
The investment and asset management section was restructured in 2008 with the aim of improving efficiency and increasing cooperation with Dutch parent company, Delta Lloyd Groep. At the start of the year, investments were put on a new footing and cooperation with the Delta Lloyd Groep clearly improved. Because of this, it was no longer necessary for Delta Lloyd Germany to operate its own back office. Therefore this part of Delta Lloyd Investment Managers GmbH, DLI for short, was sold to the Dutch KAS Bank in June 2008. The DLI middle office, which is responsible for strategic management and investment controls for insurance for the group, was combined with the mortgages and property sections to create a new entity, Delta Lloyd Anlagenmanagement GmbH. What was up until then the DLI front office, where asset management and also the management of Gries & Heissel Bankiers AG super funds was based, was incorporated into the structure of the private bank.
Focusing on core competencies
At the same time, Gries & Heissel Bankiers AG has reduced its number of locations; the bank is now concentrating on the two strongest positions in Berlin and Wiesbaden. One of the bank's main focuses lies with asset management which in previous years was praised on a number of occasions by independent ratings company firstfive. In the difficult market environment of the past year, the bank succeeded in avoiding large losses in customer portfolios, thanks to a careful investment strategy whereby only one third of the money was invested in international share indices. Neither shares from US investment banks nor low-rated corporate bonds from the financial sector featured in the bank's asset management deposits.
New funds distribution company
Delta Lloyd Asset Management Vertriebs GmbH was established in August to deal with fund distribution which was previously handled by Delta Lloyd Investment Managers GmbH. In Germany, this company will promote the distribution of the Delta Lloyd SICAV Funds which have already proven successful in the Netherlands. One of these funds, the sustainably-investing Delta Lloyd L Water & Climate Fund, was successfully introduced in Germany in November 2007.
Overall the gross reinvestment fund brokerage has increased from €32.1 million last year to €81.5 million, despite the difficult market conditions. Out of this, the DWS Riester Fund, within the Delta Lloyd-marketed DWS RiesterRente Premium, accounts for €29.9 million, the funds of funds and super funds for a further €28.1 million, and €23.5 million is accounted for by the MultiBankenPlattform which was successfully introduced in August 2008. This new tool for investment consultancy provides brokers with an overview of their clients' investments and supports them in advising clients and improving portfolios.
Course set for important developments
"Over the last two years we have already got things moving and drafted a comprehensive package of measures. The positive progress of our main products in the financial security sector shows that we are on the right path," explains Christof W Göldi, chairman of the board of Delta Lloyd Deutschland AG. "In other areas, however, and particularly as regards costs, we are still seeing clear need for action. We must make this a priority for 2009 in order to remain competitive in the medium and long-term."
Strong financial footing
The financial footing of Delta Lloyd in Germany is still very strong. The solvency margin stands at 195%, still a high level, offering Delta Lloyd customers a high level of security for their investments. Furthermore, as a subsidiary of the Delta Lloyd Groep, Amsterdam, Delta Lloyd Germany is linked to a strong network: Delta Lloyd Groep, Amsterdam, was awarded an "AA-" rating by Standard and Poor's and is part of the equally highly-rated Aviva Group, the largest life insurer in Europe and number five worldwide.
Outlook for 2009
The modelling and remodelling of distribution will continue into the current financial year. The number of partnerships within the brokerage organisation will continue to increase and productivity of current partnerships will improve. At the same time new distribution partnerships will be established for exclusive distribution. In addition, current processes and allocation of tasks between external and internal services will be improved upon further. Cost reduction within the group will also be a priority.
The main product focus in the financial security sector will furthermore be unit-linked pensions and basic pensions, as well as occupational disability and long-term care. The introduction of a further Delta Lloyd SICAV fund is planned for the second quarter.
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For further information:
Martina Fassbender
Telephone: +49 (0) 611 773 25 71
Fax: +49 (0) 611 773 14 25 71
E-mail: martina.fassbender@deltalloyd.de
Website: www.deltalloyd.de
Notes to editors:
About Delta Lloyd
Delta Lloyd Germany is a 100% subsidiary of the Delta Lloyd Groep, Amsterdam, and therefore part of the British Aviva Group. The company is a one-stop shop offering a wide range of financial, investment and provident products as well as expert advice on all financial matters. Along with the Delta Lloyd Lebensversicherung and Hamburger Lebensversicherung life insurance companies, the Delta Lloyd Group in Germany is made up of a pension fund and a consultancy company for company pension schemes, as well as its own private bank, an investment management company and a property financing brokerage.