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European Insurance and Occupational Pensions Authority
News article17 January 20232 min read

Insurance and pension products rode the market rebound and offered high returns in 2021


The European Insurance and Occupational Pensions Authority (EIOPA) published today its Costs and Past Performance Report, which provides an overview of the returns and costs of insurance and pensions products in 2021. The report aims to improve transparency in the sector, facilitate comparisons between similar products and thereby, ultimately, enhance the EU’s Capital Markets Union.

EIOPA’s analysis of over 1000 insurance-based investment products (IBIPs) has shown that these products benefitted from the post-pandemic market recovery and offered positive returns to investors in 2021. Unit-linked products delivered an average net return of 9.4% on the back of a strong rebound in financial markets, while hybrid and profit participation products garnered 4.0% and 1.3%, respectively. While net returns in 2021 were overall high, inflation is expected to weigh on real returns for consumers in the future.

The risk profile of unit-linked products, which closely follow market trends, helped them generate higher returns in 2021. Nevertheless, they may expose consumers to significant losses when markets underperform as it was the case in 2018. For profit participation products, longer holding periods resulted in higher net returns.

Regarding costs, despite a slight decrease in the cost of unit-linked products (-5 bps), profit participation products remain less costly. On average, costs associated with profit participation products reduce yields by 1.6% while the same metric for hybrid and unit-linked products stands at 2.3%.

Preliminary findings based on a limited sample indicate that products with sustainability features were both higher-yielding and cheaper than their non-ESG peers in 2021. Unit-linked products with sustainability features delivered a net return of 11.2% and an average reduction in yield of 2.1% as opposed to their non-ESG peers that generated net returns of 9.4% with a yield reduction of 2.3%.

This year’s report also analysed the performance of cross-border products and found that they operate with higher cost levels likely linked to higher distribution costs.

Regarding pension products, while challenges in collecting and comparing data persist, the available sample indicates that trends for such products are similar to the ones observed with IBIPs in the sense that schemes more exposed to market movements reported higher returns in 2021.

read the report


EIOPA and the European Securities and Markets Authority will organise an event on 2 February 2023 to discuss the findings of the two institutions’ separate costs and past performance reports. To read ESMA's report, click here. Further information about the event and how to register is available here.

Insurance-based investment products (IBIPs) are insurance products that offer a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed to market fluctuations, directly or indirectly. Typical examples of IBIPs are unit-linked life insurance, profit participation life insurance and traditional life insurance products.


Publication date
17 January 2023