A look at Generali

What did Bertolt Brecht say? First comes the food, then the morals... This still seems to be true, and it is especially true in the following case: The problems at Generali Lebensversicherung concerning wrongfully retained kickbacks shed light on the ethos of the German insurance landscape.

After months of negotiations, Generali Lebensversicherung now has to pay back money previously withheld to its customers. Insurance companies are reluctant to share additional income with their clients, but in this case this took on a particularly serious dimension.

What happened?

Generali, under the care of its Italian parent company, is one of the largest providers of private life and pension insurance in Germany. Millions of such unit-linked policies have been sold in recent decades, which is basically a good thing as it helps savers to provide for their old age.

However, the problem lies in the hidden commissions and therefore a lack of transparency. The majority of Generali contracts are sold via Deutsche Vermögensberatung (DVAG). These advisors receive a salary for their services, which is paid by the customer. The costs are deducted from the customer's monthly savings contributions until the initial costs for taking out the insurance have been paid.

Double commission?

Between 2021 and 2023, however, Generali customers were charged double costs: once for the insurance itself and once for the fund management. These fund costs flowed back to Generali as so-called kickbacks. Generali therefore earned twice - at the expense of savers.

Consequences and outlook

It has been clear for years that customers must benefit from such kickbacks. BaFin has now taken a closer look and found that many insurers are collecting twice. Generali is the first company to back down and pay back money.

Many Generali customers can now look forward to higher values in their insurance policies. However, Generali plans to maintain these kickback agreements in the future. Whether this is beneficial to trust in the industry remains questionable.

For detailed information on this case and how it could affect your pension provision, stay tuned to our website.

#Insurance ethics #GeneraliScandal #Life insurance #Consumer protection #Financial transparency