The Shift in Group Life & Pension in Europe
In the past, group and individual life and pension funds have been a steady generator of enough income for workers’ protection and retirement needs, due to affordability, low interest rates and shorter life expectancy.
There is a movement in Europe to privatise more pension plans and these changes are starting to have an impact on work/group pensions. The prolonged COVID-19 pandemic puts additional pressure on the funding of pensions and protection schemes – driving higher unemployment and reducing tax revenues. Remember, these same tax revenues laid the basis of state pensions and subsidised workplace pensions.
The current higher unemployment rates amongst those closer to retirement may result in the early “raiding” of pension funds. Retirees would rather draw on their pension than seek re-employment in today’s competitive environment. Unfortunately, this means that some of their retirement savings will not be available to them in later life when they may need it most.
Early exit from the workplace also means the potential loss of any life and ill health protection benefits, unless either the employer’s scheme maintains these until the normal retirement age, or they can somehow be continued at the individual’s personal cost.
The average person, without a professional financial advisor or who lacks clear information from their employer or benefits provider, faces a significant struggle to figure out where they stand in this new reality. In a climate with unparalleled levels of uncertainty being driven by the pandemic , worrying about pension benefits should not be placed directly on the employee. Without clarity around benefits and options, it is difficult to envisage how an effective engagement model that successfully supports employee well-being can be deployed.
Individuals need clarity of options, an understanding of the impact of short-term decisions on long term finances and the timely provision of information.
Insurers need a system that can:
- Automate processes enabling customers to quickly see the status of their account and transactions
- Analyse data to prepare for trends in the market and the demographics
- Transparency provides for online quotes and concise Pension Benefit Statements
- Move to the cloud for business continuity, streamlined upgrades allowing for regulatory changes and access from anywhere at anytime for both customers and employees
If your current system can’t do all these things and more, it’s time to look for a digital solution. A cloud-based, unified policy administration system, fully integrated with a complementary digital suite on a single platform can work for today and tomorrow.
People who read this also visited
- The Past 4 Years Have Exposed the Urgency of Modernising Reinsurance Platforms (4 of 5: Human Error)
- Five Things We Can Learn from the Digital Banking Revolution
- Note to Insurers: ‘The Factory is the Product’
- Forecast: Cloudy with Sunshine – Perspectives on Transitioning to the Cloud
- Around The States In 30+ Days – A Journey of Learning: Part 2