"Long-term financial security cannot be assured"
In an interview, Christian Nuschele, head of sales and marketing at Standard Life in Germany and Austria, discusses the future prospects of the company in the German pension market and the growing importance of sustainably investing savings products.
The current economic climate, characterised by low interest rates, has been cemented by the measures taken by governments and central banks in response to the Corona crisis. The Federal Reserve Chairman in the USA has announced a zero-interest rate policy until 2023, and Nuschele expects a similar policy in Europe, as the European Central Bank (ECB) has kept the key interest rate in the Eurozone at 0 percent.
This low-interest-rate environment has posed challenges for customers, particularly those with a longer investment horizon. The situation 25 years ago was different, with high interest rates on fixed-income securities and guaranteed interest rates of 4% on classic insurances. However, the savings rate in Germany rose to a record high of 16.3 percent in 2020, indicating a shift in financial behaviours.
Modern insurance products offer good investment opportunities for both risk-oriented and conservative customers. They provide similar flexibility in deposits and withdrawals as a savings account, and unit-linked policies can help customers achieve their pension goals. These policies have proven to generate attractive returns in times of low interest rates.
Standard Life, founded in 1825 in Edinburgh, has been offering its policies in Germany since 1996. The company focuses on providing customers with retirement products that emphasise safety, lifelong pension payments, flexibility, inflation protection, and family security amid low-interest rates. They recognise a high advisory need for customers near or in retirement to optimally use accumulated assets and address changing income-expense structures to avoid risking their retirement savings.
In addition, Standard Life is committed to sustainably investing savings products. The second part of the interview will delve into the company's approach to the German pension market and its efforts to make a positive impact on the environment and society.
Moreover, insurance products not only offer investment opportunities but also security and a tax advantage. Customers can quickly access their saved money with an insurance product, and these policies can secure the customer and their dependents in times of need.
The economic problems caused by the Corona crisis have led to a credit intake of 179.8 billion euros by the German government. This underscores the importance of saving and investing wisely, particularly in a low-interest-rate environment.
In conclusion, while the current economic climate presents challenges, Standard Life is well-positioned to help customers navigate these times and achieve their financial goals. The company's focus on sustainability, safety, and flexibility makes it an attractive choice for customers seeking to secure their future and make a positive impact on the world.
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