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High losses for motor vehicle insurers: repair costs continue to rise
Motor vehicle insurers with billions in losses: Drivers should prepare for an increase in premiums as repair costs continue to rise. Experts warn of rising premiums.
High losses for motor vehicle insurers: repair costs continue to rise
Drivers have to prepare for further increases in vehicle insurance premiums, as providers are expected to record billions in losses again this year. Last year, car insurers were already in the red, which made car insurance significantly more expensive for many car owners. Unfortunately, there is no end in sight to this price increase for the time being. According to a current projection by the General Association of the German Insurance Industry (GDV), motor vehicle insurers are expected to record a loss of up to two billion euros in 2024.
The high losses among motor vehicle insurers are mainly due to the constantly increasing repair costs. GDV Managing Director Jörg Asmussen explained that premium income is expected to increase to around 33.6 billion euros. However, insurers would have to spend between 34.9 and 35.6 billion euros on claims and administration. These costs exceed revenues and result in expected losses. The increasing repair costs result from complex technical systems in modern vehicles. In the past, only one bumper might need to be replaced, but today a whole range of high-priced sensors can be replaced. This not only leads to increasing material costs, but also to increased time spent on repairs.
In addition, according to a study, hourly rates in vehicle repair shops have increased significantly. Asmussen emphasized that both spare parts and labor costs in the workshops are becoming increasingly expensive. Average property damage in a car's motor vehicle liability insurance is expected to be around 4,000 euros this year, compared to 2,500 euros in 2014. Repairs to electric cars in particular are between 30 and 35 percent more expensive than to combustion vehicles. The complex technology in modern cars causes ever higher repair costs, which ultimately puts a strain on motor vehicle insurers. Given these developments, a price increase in vehicle insurance premiums is likely.