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Motor vehicle insurance: billions in losses expected due to rising repair costs
Increasing losses threaten motor vehicle insurers: billions in losses could lead to premium increases. Find out why repair costs and hourly rates at workshops are increasing. #Car insurance #Billions in losses #Increase in premiums #Repair costs
Motor vehicle insurance: billions in losses expected due to rising repair costs
Drivers in Germany have to prepare for a possible increase in premiums for their vehicle insurance. Last year, car insurers already recorded losses, which led to a noticeable increase in insurance premiums. The outlook for the current year shows no signs of easing, as various providers are expected to once again post losses worth billions.
According to a current estimate by the German Insurance Association (GDV), it is becoming apparent that motor vehicle insurers will likely have to accept losses of up to two billion euros in 2024. The main cause of this financial burden is the continually rising repair costs, which are causing problems for insurers.
GDV Managing Director Jörg Asmussen emphasized that premium income is expected to rise to around 33.6 billion euros, while insurers' expenses for claims and administration could be between 34.9 and 35.6 billion euros. In particular, the increasingly complex technical systems in modern vehicles lead to costly repairs. In the past, simple bumper repairs were sufficient, whereas today expensive sensor systems need to be replaced. Not only the material costs, but also the working time required for repairs have increased.
Furthermore, according to a study, hourly rates in vehicle repair shops have increased significantly. The costs for average property damage in motor vehicle liability insurance for a car have almost doubled in recent years. Repairs to electric cars in particular prove to be particularly expensive, as they are on average 30 to 35 percent more expensive than repairs to combustion engines.
Despite the high losses and rising costs in the motor vehicle insurance industry, it is up to individual insurers to decide whether to increase premiums. However, Asmussen emphasized that the development of damage has a direct influence on contributions. Drivers should therefore prepare for a possible adjustment in vehicle insurance premiums.