Insurance is becoming more expensive: Experts expect rising prices due to inflation and natural disasters.

Insurance is becoming more expensive: Experts expect rising prices due to inflation and natural disasters.

According to a report by www.tagesschau.de, insurance is likely to become more expensive again. In addition to inflation, the increased costs caused by natural disasters are also cited as key price drivers. Motor vehicle insurance is particularly affected by inflation. Companies' expenses for administration, sales, car repairs and other damage are expected to be around 2.5 billion euros higher than their income this year.

When negotiating contracts with reinsurers, insurers and brokers have to be prepared for demands for higher prices. The world's largest reinsurers, such as Munich Re and Swiss Re, consider inflation as a "significant factor" in price negotiations. According to Swiss Re, inflation in the euro zone is expected to be 2.6 percent next year. Munich Re even assumes inflation of three percent.

Demand for reinsurance coverage is increasing due to increasing and severe natural disasters, social unrest and growing cyberattacks. An additional requirement of four to five billion euros is expected for natural catastrophe coverage in Europe, Africa and the Middle East, including one billion in Germany.

Due to the increasing number of hacker attacks, Munich Re also expects further growth in the cyber insurance business. The European cyber market is estimated to be worth $2.3 billion in 2022 and the market volume is expected to be around $8 billion by 2027.

Overall, it is to be expected that the price increases in the reinsurance business will not be felt directly by consumers, but primary insurers will endeavor to pass on the higher costs to customers.

Source: www.tagesschau.de