Motor vehicle insurance premiums are on the way up: Experts predict price increases of up to 10 percent in the coming year.

Motor vehicle insurance premiums are on the way up: Experts predict price increases of up to 10 percent in the coming year.

According to a report by www.versicherungsbote.de, car insurance premiums in Germany are expected to rise by an average of ten percent. This announcement comes from the German subsidiary of the reinsurer Hannover Re. The industry has been undercutting itself for years with a policy of cheap premiums, but at the same time claims costs are rising. Although the restrictions during the Corona period led to fewer accidents, insurers are faced with the challenge of increasing their prices in order to correct the loss-making results.

Expert forecasts say that a price adjustment of around 20 percent would be necessary for insurers to start making profits again next year. This means that in 2023 many insurers will continue to spend more on claims and administration than they earn in premiums. According to estimates, the motor vehicle insurance industry will only become profitable in the medium term, at the earliest in 2026. The problem is that these necessary price adjustments can hardly be enforced on customers. The market is competitive and low premiums are an important factor in the fight for customers willing to switch.

In addition to the forecast price increases for motor vehicle insurance, the online broker Verivox is already observing higher price adjustments for new tariffs. Tariffs in the inexpensive fully comprehensive segment have increased by 16 percent, while tariffs in the medium price segment have increased by 13 percent. This comes at an inopportune time for consumers, as they are already having to reduce their spending and save due to increased living costs.

The red numbers in the motor vehicle insurance industry can be attributed to various factors, including high inflation, rising prices for motor vehicle spare parts, increasing numbers of accidents and car thefts, and natural damage such as hail or flooding after heavy rain.

Given these developments, it is likely that the planned price increases in motor insurance will have a significant impact on the market and consumers. Customers could be faced with the decision of whether to accept higher premiums or look for cheaper alternatives. This could lead to changes in the competitive landscape and customer behavior.