Where is the German motor vehicle insurance industry heading? A financial expert analyzes the current situation and predicts rising tariffs.

Where is the German motor vehicle insurance industry heading? A financial expert analyzes the current situation and predicts rising tariffs.

According to a report by m.focus.de, the motor insurance industry is grappling with increasing challenges and losses due to increased claims costs and increased car accidents as a result of easing Covid-19 mobility restrictions. This could lead to car insurance price increases. HUK-Coburg in particular is forecasting major losses and red numbers for the automotive division this year.

Since the combined ratio will be 108 to 110 percent, it looks like car owners will have to expect more expensive vehicle policies. In addition, German car insurers are expected to make a loss of more than 2.5 billion euros this year, which could lead to a large number of deals with other insurers.

The rising repair costs and accident numbers mean that motor vehicle insurance is on average 8.8 percent more expensive than in the previous year. Verivox experts expect noticeable price increases, especially for existing customers. However, those insured still have the opportunity to save money by switching providers.

Improvements such as driver protection benefits and pay-as-you-drive options in vehicle policies can also be noticed, which enable more individual and fairer premium calculations. It should be noted that most drivers remain loyal to their company despite the high potential for price savings. Although switching activity within the automotive sector increased, the majority of customers remain loyal to their previous provider. New customer contracts were mainly won by Allianz, AXA, HUK24, HUK-Coburg and LVM.

These developments primarily impact car owners and could lead to increased financial burdens for consumers. It is advisable for drivers to compare premiums and benefits from different plans to find the best possible option. The rising prices could also lead to a change in the car insurance market as customers look for alternative and cheaper options. This could change the competitive landscape for auto insurance providers.