New collective agreement signed in insurance

In June 2002, the collective bargaining parties in the German insurance sector reached a new 16-month pay agreement which provides for a 3.5% pay increase.

On 20 June 2002, the Unified Service Sector Union (Vereinte Dienstleistungsgewerkschaft, ver.di) and the German Employers' Association for Insurance Companies (Arbeitgeberverband der Versicherungsunternehmen in Deutschland, AGV) signed a new collective agreement for the 240,000 or so employees in the insurance sector.

The settlement was reached after a rather turbulent bargaining round. Initially, the insurance employers refused negotiations with ver.di, since they accused the union of calling for an increase in the upper earnings limit (Beitragsbemessungsgrenze) for income subject to statutory health insurance contributions (above this level, employees may opt to take out private insurance). According to AGV, an increase of the upper earnings limit, which currently amounts to a monthly income of EUR 3,375, would jeopardise the economic basis of many private insurance companies and would threaten at least 50,000 jobs. Therefore, AGV declared that it would not enter into negotiations until ver.di had withdrawn its position.

An increase in the upper earnings limit has been proposed by various experts in order to broaden the financial basis of the statutory health insurance scheme. Although ver.di made clear that it had never officially supported such proposals, it sharply rejected what it saw as the employers' attempt to link political debates with collective bargaining. The president of ver.di, Frank Bsirske, stated that collective bargaining cannot depend on whether or not the bargaining parties like each other's political positions. After two meetings between ver.di and AGV, at which the employers continued to refuse negotiations proper, the union started to organise protest meetings and warning strikes in insurance companies and prepared a strike ballot among its members. The employers finally accepted negotiations after AGV and ver.di had agreed a joint declaration on the 'safeguarding of employment in insurance', which supports the existing relationship between statutory and private health insurance.

After the political dispute was solved, it took only two rounds of actual negotiations for an agreement to be reached. Initially, ver.di demanded a 6.5% increase to be used for substantial increases in basic pay, additional time for further training and the introduction of a sectoral private pension scheme, in order to use the opportunities provided by the recent pension law reform (DE0106227N). The employers at first offered only a 2.5% pay increase but proved readily prepared to increase their offer.

The new pay agreement has a duration of 16 months (until 30 September 2003) and provides for:

  • a flat-rate payment of EUR 100 for all employees (with the exception of vocational trainees) for the month of June 2002;
  • a 3.5 % pay increase from 1 July 2002; and
  • a 3.5 % increase in apprenticeship allowances from 1 July 2002.

Following the award of the pay increase, employees in insurance will have basic monthly pay of between EUR 1,891 and EUR 3,693 depending on their pay grade and length of service - see the table below.

New pay rates in insurance (basic monthly pay in EUR)
. Pay grade
Years in job I II III IV V VI VII VIII
1 1,891 1,912 1,967 2,016 - - - -
2-3 - 2,017 2,024 2,099 - - - -
4-5 - - 2,137 2,181 2,310 - - -
6-7 - - 2,249 2,260 2,394 2,525 2,658 -
8-9 - - - 2,341 2,495 2.655 2,813 3,063
10-11 - - - 2,422 2,605 2,790 2,076 3,274
12-13 - - - 2,501 2,714 2,926 3,139 3,480
Over 14 - - - - 2,827 3,063 3,299 3,693

Source: Ver.di 2002

Under the agreement, vocational trainees will receive a monthly apprenticeship allowance of:

  • EUR 711 in the first year of training;
  • EUR 783 in the second year of training; and
  • EUR 854 in the third year of training.

Besides the new pay settlement, the bargaining parties agreed to start as soon as possible new negotiations on employment protection, further training and the introduction of a sectoral pension scheme.

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