EIOPA publishes pension product performance report
Written by Sunniva Kolostyak and Adam Cadle
The European Insurance and Occupational Pensions Authority (EIOPA) has published a report on the costs and performance of pension and insurance products, following a request from the European Commission to the European Supervisory Authorities (ESAs).
The Report on Costs and Past Performance for December 2018 covers pension products, insurance and retail investment and is the first of a series of periodically published reports.
It provides aggregate data on the costs of certain personal pension products (PPPs) to a limited extent, as well as insurance-based investment products (IBIPs) across the European Union, and sets out the net performance for the period between 2013 and 2017.
The PPP data used in the research came from 10 insurance undertakings, from three jurisdictions. However, the report said it found that an absence of standardisation will require further work to broaden the market coverage and products covered.
The report shows that costs vary depending on the type of product, premium, risk category and jurisdiction. Variations in asset management costs related to different risk categories are a major factor.
As requested by the European Commission, EIOPA sought to base the report on data contained in the Key Information Documents (KID) but given an absence of data on past performance, the authority has requested additional data.
The report concludes that due to the differences between products, there are significant challenges with comparing performance, for example in view of the values of guarantees, the impact of smoothing mechanisms and terminal bonuses of profit participation products, and the impact of risk and volatility.