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The Actuary The magazine of the Institute & Faculty of Actuaries

Loadsamoney in life and pensions

Optimistic projections of the growth potential in European life and pensions and global financial services have come from German giant Allianz and from consultant Mercer Oliver Wyman (MOW).

Speaking at the time of the Allianz AGM, CEO Michael Diekmann said: ‘We believe that the biggest opportunities for growth are in the market for retirement provision and capital accumulation – particularly in Europe and the USA. In Germany and in other European countries, awareness of the gap in pension provision and the need to close that gap with private retirement provision has grown substantially during recent years. This affects around 160m people throughout the EU.

‘In western Europe alone, we’re expecting the volume of investment in private retirement provision products to double over the coming ten years: from around e7,000bn today to more than e16,000bn. This means huge growth potential for private as well as company pension provision’, Diekmann added.

Meanwhile a report by MOW entitled ‘Future of Financial Services – Future Scenarios’ predicted a significantly different shape and magnitude for the world’s financial services industry over the next 15 years. Key conclusions included:

  • financial services will represent 10% of global GDP by 2020 with revenue growth to $6 trillion;
  • significant value migration will take place within financial services, at individual firm, sub-sector, and geographic levels;
  • macroeconomic factors will account for two-thirds of growth, with business improvement and industry innovation accounting for one-third only;
  • successful companies will balance: taking positions in growth markets; managing for value growth in maturing businesses; and using dynamic hedging against potential negative market developments.

More at www.merceroliverwyman.com/en/Files/Press/Press_Release_-_FoFS_III_English_April_05.pdf