Aging Population Fuels Life Insurance Market Growth in the Netherlands, States Timetric17 Oct 2012 • by Natalie Aster
The Dutch life insurance segment is one of the largest in Europe in terms of gross written premium. The life insurance segment holds the second-largest share of the country’s insurance industry, with 27.1% of the total gross written premiums in 2011. In 2007–2011, the life insurance industry in the Netherlands went through some serious setbacks. Impacted by the global financial crisis in 2008, major insurers sought assistance from the Dutch government. The entry of bank savings products with the same tax advantages as insurance products also increased competition, putting pressure on the growth of life insurance products, especially unit-linked products. The gross written premium fell at a CAGR of 5.1% in 2007-2011.
Insurance brokers dominated the Dutch life insurance segment in 2007-2011 and accounted for around 44% of the total market commission in 2011. However, the recent Ministry of Finance ban on commission for complex products, effective from January 2013, is expected to lead to an overhaul in the role of brokers as a distribution channel. The country’s aging population, reforms in pension law and insurers’ efforts to minimize cost and enhance efficiency in terms of writing new business are expected to drive the Netherlands life insurance segment growth in 2012–2016.
According to the report “Life Insurance in the Netherlands, Key Trends and Opportunities to 2016” by Timetric, during the review period (2007-2011), the Netherlands’ aging population was an important driver for the life insurance segment, and this is expected to continue over the forecast period. According to figures from the Dutch Association of Insurers, in 2011, there were around 2.5 million people over the age of 65 in the Netherlands, comprising 15.6% of the population. This represents a significant customer base for life insurance companies operating in the country. The figure is expected to increase over the forecast period (2012-2016)and beyond, and the Dutch population aged over 65 years is forecast to stand at 3.4 million in 2035, representing 19.7% of the overall population. This will favor investment in long-term savings products.
Life Insurance in the Netherlands, Key Trends and Opportunities to 2016
Published: August, 2012
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The Dutch life insurance segment is highly concentrated, with the country’s top five insurers accounting for a collective market share of 65.3% in 2010. Further consolidation is anticipated over the forecast period as a result of the enduring impact of the European debt crisis and the forthcoming implementation of the EU’s Solvency II directive. Most notably, Solvency II regulations are expected to force many smaller companies to merge with larger ones in order to achieve the required level of solvency.
More information can be found in the report “Life Insurance in the Netherlands, Key Trends and Opportunities to 2016” by Timetric.
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