Concordia in Hanover: Motor vehicle insurance will be back in the black in 2025!

Concordia in Hanover: Motor vehicle insurance will be back in the black in 2025!

Concordia Insurance in Hanover has great optimistic expectations for 2025. CEO Stefan Hanekopf predicts that the company will finally leave the loss zone in the motor vehicle insurance segment behind and is aiming for a “black zero” for the financial year. This turn of events comes after a loss of 4.6 million euros in the motor insurance sector in 2024.

The company had already increased motor insurance premiums by an average of around 10 percent in 2024 to ease financial pressure. However, no information is known about further price changes at the turn of the year 2024/2025, although further “adjustments” are on the horizon. Meanwhile, Concordia is working intensively with partner workshops to limit the increased costs.

Rising costs and an uncertain environment

The industry is currently faced with a persistently difficult situation. Rising spare part prices and high workshop costs are placing a considerable burden on motor vehicle insurers in Germany. Loud GDV Car repair costs are expected to rise by 4.5 percent in 2025 compared to the previous year. This increase is primarily caused by higher prices for spare parts and workshop work.

The GDV also points out that spare parts were around 75 percent more expensive in 2024 than in 2014, while general inflation was only around 28 percent during this period. Jörg Asmussen, general manager of the GDV, criticizes the current design protection for car manufacturers, which leads to high prices for visible spare parts. The federal government's repair clause from 2020, which includes long transition periods until 2045, makes competition on the replacement parts market more difficult.

Impact on the industry

In the last two years, motor vehicle insurers in Germany have suffered losses of almost five billion euros. This development has led many insurers, including Concordia, to increase premiums. In 2024, premium income for motor vehicle liability insurance increased by 8.1 percent, for fully comprehensive insurance by 14.1 percent and for partial comprehensive insurance by 5.1 percent. The Concordia Group's total premium income rose from 971.5 million euros to 1.04 billion euros.

Despite the positive growth in premium income, Concordia saw its annual net profit decline from €10.5 million to €9 million, due to investments in IT. The underwriting result was minus 2.1 million euros, while the investment result was 23.8 million euros.

However, the full impact of rising repair costs on auto insurance premiums remains to be seen. It depends heavily on the decisions of individual insurers, while insurance regulator BaFin expects motor vehicle insurers to take claims inflation into account when calculating premiums. Experts believe that comprehensive insurance could continue to have higher expenses than income, especially depending on the hail and storm season.