Allianz Leben will increase interest on life insurance policies in the coming year. With classic life and annuity insurance, the current interest rate will rise to 2.5 percent on average in 2023 after 2.3 percent last, as the industry leader announced on Monday in Stuttgart.

The newer model with a reduced guarantee increases from 2.4 percent to 2.6 percent. Allianz Leben CEO Katja de la Viña spoke of a clear signal at a time "when many people want to fundamentally improve their future provision".

The current interest is made up of the profit participation, the amount of which the insurers decide depending on the economic situation and the success of their investment strategy, and the guaranteed interest rate set by the Federal Ministry of Finance. This has been 0.25 percent for new contracts since the beginning of 2022. Older policies sometimes yield significantly more here. Current interest only relates to the savings portion after deducting transaction and sales costs, among other things.

What customers can expect in 2023

Life insurance customers whose contract expires in 2023 can expect a total interest rate including terminal bonus of 3.2 percent (last: 2.9 percent) for classic products or 3.5 percent (3.2 percent) for the model with a reduced guarantee.

"In addition to rising interest rates on the capital market, our customers benefit from the broad mix of our investment strategy of equities, fixed-income securities and alternative, unlisted investments such as infrastructure projects," explained Volker Priebe, member of the Management Board. "Our financial strength also plays a role."

According to Priebe, Allianz Leben has not felt any major decline in demand for old-age provision products due to the significant increase in inflation. "The provision for old age should not be saved," warned Priebe. "Employers are also noticing that company pension schemes are an important factor in the competition for skilled workers."