The motor vehicle insurance industry faces challenges: Why expensive damage is driving up rates

The motor vehicle insurance industry faces challenges: Why expensive damage is driving up rates

According to a report from www.focus.de, the motor vehicle insurance industry in Germany is on a historic scale. The industry's combined ratio is expected to be 108 to 110 percent in 2023. This means that for every 100 euros in income there are up to 110 euros in expenses. This will cause car insurance to become more expensive. German car insurers are expected to make a loss of more than 2.5 billion euros this year. Customers have to prepare for rising premiums. But despite the high savings potential, only a few customers change their insurance and often remain loyal to their current provider.

The increased damage costs and repair costs will now mean that German car insurance will become more expensive in 2024. Tariffs are expected to increase by an average of 8.8 percent. The high level of switching activity within the automotive sector at the end of the year shows that consumers are quite willing to switch to save money. Nevertheless, 85 percent of customers remain loyal to their previous provider. There are good offers from various direct and service insurers that offer different prices and services.

Due to rising premiums, people with car insurance can save a lot of money by switching. The difference between the middle and the cheapest price segment is currently around 26 percent on average. It is therefore worth comparing different offers in order to find the cheapest car policy for you.

The increased costs in the car insurance industry are impacting the market, consumers and the industry itself. The rising rates will burden consumers and may lead them to look for cheaper alternatives. The high combined ratios will put pressure on car insurance companies to adjust their premiums and fight for customers. This competition could lead to increased variety on offer from which consumers can benefit.