Motor vehicle insurance: Falling premiums despite record spending - financial expert analyzes new industry monitor data for 2023

Motor vehicle insurance: Falling premiums despite record spending - financial expert analyzes new industry monitor data for 2023

According to a report by www.versicherungsbote.de,

The motor vehicle insurance industry in Germany is facing major challenges. A fierce price war fueled by comparison portals such as Check24 and Verivox, combined with increasing claims expenses and costs due to new technologies in vehicles, is leading to a market that has become unprofitable for many companies.

Gross written premiums per contract have fallen since 2017, although claims expenses have continued to rise. In 2022, the average premium was almost at the same level again compared to 2017. Nevertheless, insurers were still able to record premium increases as the number of contracts increased.

The worst combined ratio since 2014 is 84.02 percent, which means that insurers, on average, spend more on claims expenses and other costs than they earn from premiums. In 2022, the combined ratio for the motor vehicle branch averaged 102.42 percent. This is the worst value for the entire period from 2014 to 2022.

In addition, the updated data even showed a combined ratio of over 100 percent. This means that numerous insurers had to be in the red in 2022. Due to these worrying developments, it is clear that the motor insurance industry is facing major economic challenges and urgently needs to find sustainable solutions to ensure its profitability.