Ergo will no longer market life policies with guaranteed rate

After Allianz, Generali, HDI, Targo and Zurich, the insurer Ergo also announced that it will no longer underwrite any life policies with a guaranteed rate by the end of 2015.

With low interest rates and Solvency II requirements, most German insurance companies can no longer guarantee their insured certain return. The guaranteed rate is 1.25% today. This type of policy was a featured placement in the 1990s and early 2000s.

The situation of life companies has highly deteriorated so much that the authorities have enacted legislation supposed to save small insurers and almost 90 million contracts.

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