Significantly rising insurance premiums for car owners in Germany: Financial experts warn that the trend will continue.

Significantly rising insurance premiums for car owners in Germany: Financial experts warn that the trend will continue.

Baden-Baden (dpa) - According to Hannover Re, car owners in Germany will have to expect significantly rising insurance premiums for years to come. Above-average increases in spare parts and repair costs led to “massive losses” for motor vehicle insurers, said Hannover Re Germany boss Michael Pickel at the industry meeting on Monday in Baden-Baden. Further price adjustments are “inevitable” in order to bring the business out of the red and make it profitable again in the long term.

How Sueddeutsche.de reported, the increased spare parts and repair costs have led to massive losses for motor vehicle insurers. This forces insurance companies to further increase their premiums in order to improve their bottom line and be profitable in the long term. Hannover Re, one of the world's largest reinsurers and the largest motor vehicle reinsurer in Germany, expects premiums to rise by a double-digit percentage. Comparison portals such as Verivox and Check24 have already reported premium increases of up to 16 percent. However, these are only tariffs for new customers and those switching. Hannover Re also takes into account the tariffs for existing customers.

In the past, motor vehicle insurers had often increased prices for existing customers, but attracted new customers with cheap offers. This led to intense competition in the industry and prevented larger price increases overall. However, the industry is now in the red. According to Hannover Re, motor vehicle insurers are expected to spend 2.9 billion euros more on claims, administration and sales this year than they earn in premiums. Although premium increases are expected, the loss of motor insurers is only expected to fall to 2.7 billion euros.

Hannover Re also expects prices for reinsurance protection in Germany to continue rising beyond the motor vehicle business. The long-standing trend towards higher claims payments, particularly in relation to extreme weather such as heavy rain, floods, storms and hail, will continue. This affects private households as well as businesses and industry.

This development has a significant impact on the market, consumers and the insurance industry as a whole. Car owners face significant increases in insurance premiums, resulting in higher vehicle ownership costs. Car insurers will have to charge higher premiums to improve their bottom line and counteract losses. This will affect competition in the industry and may lead to some insurance companies reducing their presence in the market. Consumers will be encouraged to review their car insurance policies carefully and look for cheaper deals. In addition, rising prices for reinsurance protection will also affect other areas, such as coverage for extreme weather events. Private households, businesses and industry must expect higher costs to protect themselves against damage caused by extreme weather.

Source: According to a report by sueddeutsche.de