New laws removing tax breaks from the German insurance endowment industry will force insurers to launch pension products focused on higher returns or risk losing up to half their business, according to Goldman Sachs Asset Management.

The German Investment Act, which comes into effect on December 31, abolishes incentives to invest in endowment policies, which represent half the country's €600bn ($779bn) life insurance industry, according to Dirk Popielas, head of pension and insurance at Goldman Sachs in Germany.