Higher tariffs in Bavaria: Insurance more expensive due to inflation and natural disasters

Higher tariffs in Bavaria: Insurance more expensive due to inflation and natural disasters

According to a report from www.welt.de, higher tariffs at Bayern Versicherungen are foreseeable this autumn as inflation and natural disasters affect the insurance industry. The world's largest reinsurer Munich Re plans to take inflation into account as a key factor in price negotiations with primary insurers. Natural disasters are also cited as another price driver. According to an estimate by the General Association of the German Insurance Industry, companies' spending on car repairs and other damage this year will be around 2.5 billion euros higher than their income. This means that primary insurers and reinsurers have to take into account higher prices for spare parts and other inflation-related costs. Primary insurers such as Allianz or Generali would like to pass on the higher costs to their customers.

The increasing number of natural disasters, including weather-related events such as hurricanes, but also secondary hazards such as thunderstorms, floods and wildfires, are also driving higher losses in the insurance industry. Added to this is political and economic dissatisfaction, which can lead to strikes, riots and unrest. These events can also be potentially costly for insurance companies. Additionally, there is a growing demand for cyber insurance due to the ongoing hacker attacks. Munich Re estimates the European cyber market to be worth 2.3 billion US dollars in 2022 and expects a market volume of around 8 billion US dollars by 2027.

However, Munich Re emphasizes that unaffordable risks such as the failure of critical infrastructure and cyber warfare cannot be insured. Munich Re plans to address the specifics of cyber war more clearly in its contracts and will support primary insurers in adapting their insurance conditions.

The impact of these developments on the market and the financial industry could be diverse. Higher insurance costs can impact prices for consumers and put a strain on their financial situation. Companies may have to pay higher premiums for insurance to protect themselves against natural disasters and other risks. The cyber insurance market is expected to continue growing as the threat of hacker attacks increases. This offers opportunities for insurance companies, but at the same time it also poses risks, as unaffordable risks such as the failure of critical infrastructure cannot be insured.

Overall, it is to be expected that the insurance industry will face greater challenges due to the factors mentioned. Munich Re and other insurance companies have to adjust their prices and prepare for increasing claims. Consumers and companies should review their insurance contracts and take higher costs into account.