Insurance companies manage a significant amount of assets internally, generally German fixed income securities. Traditional funded pension called Pensionskassen, also manage the majority of assets internally, but do award third-party mandates in some cases. The introduction of the Euro is causing institutions to shift domestic assets into the euro zone. This amount is generally invested in the company and seldom is specifically invested in outside assets. It is the first private pension saving product based on a defined contribution option available in Germany.
Domestic investments dominate, and most portfolios are managed internally.
There are trends towards equity and international investments, but these are most frequently externally managed in Spezialfonds vehicles. Insurance products, especially capitalization products are very popular as savings vehicles. Proposed tax reforms, if enacted, will align taxation of life products sold for savings purposes with that of bank and other investment products. The tax benefits of life insurance sold for private retirement provision will be reduced. Unit-linked policies remain less popular, but are growing somewhat rapidly.