Motor vehicle insurance 2026: There is a risk of higher premiums due to rising costs!

Motor vehicle insurance 2026: There is a risk of higher premiums due to rising costs!

The situation in the area of ​​motor vehicle insurance in Germany is tense. Thorsten Steinmann, the German head of Hannover Re, emphasized at the annual industry meeting in Baden-Baden that the major German motor primary insurers are making efforts to restore their profitability. Nevertheless, further targeted increases in contributions are urgently needed to counteract the rising costs caused by expensive workshop and spare parts prices. Expenses in motor vehicle liability insurance for treatment and care of accident victims have also increased.

A worrying trend is the rapid increase in auto parts prices, which have risen by over 80 percent in the last decade. In comparison, the general consumer price index only increased by around 30 percent, it was reported car motor and sport. These developments have resulted in German motor insurers suffering significant losses over the last two years, with a deficit of around five billion euros.

Expected losses and cost explosion

The forecasts for 2023 are not promising. The General Association of the German Insurance Industry (GDV) assumes that motor vehicle insurers will have to expect a loss of around two billion euros, despite increasing premium income of 33.8 billion euros. This leads to an alarming situation for the insurance industry, as for every euro received, 1.06 euros has to be spent on claims and administration, reports GDV.

Last year, motor vehicle insurers had to contend with losses of over three billion euros. The main cause is the continued rise in repair costs, with workshop costs reaching a record 188 euros per hour in 2023. The prices for spare parts have also increased by over six percent compared to the previous year. This means that the average property damage in a car's motor vehicle liability insurance is 4,000 euros, which represents a significant increase compared to ten years ago, when it was 2,500 euros.

Impact on drivers

These economic challenges have a direct impact on vehicle insurance premiums. Insurers must take rising claims inflation into account when calculating premiums, which leads to individual decisions by providers. An example of the price-driving factors is the development of complex workshop work, which has become even more complicated and therefore more expensive due to advances in automotive technology. The cost of certain parts, such as Matrix LED headlights, can now be over 3,000 euros.

The earnings situation in the motor vehicle business is unsatisfactory for many companies. Klaus-Jürgen Heitmann, CEO of HUK Coburg, explained that the company's losing situation is reflected in a loss of 216.3 million euros in the motor vehicle insurance business for 2023. For comparison: In 2022, HUK Coburg recorded a profit of 37.4 million euros.

The complexity of the repairs and the increasing personnel costs in the auditing sector are further factors that are putting a strain on the situation of motor vehicle insurers. Due to the ongoing supply bottlenecks for spare parts, partly due to the war in Ukraine, waiting times of up to twelve weeks are not uncommon. This means that insurers also have to pay for loss of use, which further increases the regulatory costs.

Considering all of these factors, it is clear that the coming years could be characterized by further increases in motor vehicle insurance premiums, and many drivers will have to prepare for adjustments to their insurance contracts.