Inflation is on the decline – but according to Verivox, there are far above-average price increases in a large business area of the insurance industry. No end in sight for now.
Car owners in Germany now have to dig significantly deeper into their pockets for their vehicle insurance than they did a year ago.
According to Verivox’s vehicle insurance index, car insurance has become on average 20 percent more expensive over the past twelve months – well above the general inflation rate. Anyone who takes out new insurance after buying a car will pay an average of 18 percent more for a liability policy in the mid-price segment than in April 2023, as Verivox announced in Heidelberg. Partially comprehensive insurance is therefore 19 percent more expensive and fully comprehensive insurance is 21 percent more expensive than a year ago. If you simply change your insurance without buying a car, the partial and fully comprehensive tariffs have become even more expensive.
“Already during the switching season in October and November, motor vehicle insurers increased their prices significantly in order to cover their costs,” said Wolfgang Schütz, managing director of Verivox Versicherungsvergleich. “But because claims costs continue to rise, motor vehicle insurers are still making losses.” Several insurers brought new tariff generations onto the market in April and made their premiums even more expensive. The general inflation rate, however, fell to 2.2 percent in March, the lowest value in almost three years.
In 2023, motor vehicle insurers made a deficit of over three billion euros
However, insurers are suffering from sharp increases in the costs of car repairs, which, according to the German Insurance Association (GDV), have driven this area of property and casualty insurance into the red. In 2023, German motor vehicle insurers would have a deficit of over three billion euros, and for this year GDV predicted a further loss of up to two billion euros at the beginning of the month.
The market leader for car policies is HUK Coburg, whose motor vehicle division ran a deficit of over half a billion euros last year alone. HUK CEO Klaus-Jürgen Heitmann has been accusing car manufacturers for years of increasing the prices for spare parts well above average. But workshop and other costs have also increased. The HUK had therefore announced further tariff increases.
According to Verivox’s assessment, this will not remain an isolated case. “Insurers will have to continue to increase their premiums in the medium term in order to slip back into the profit zone,” said Schütz.
Source: Stern
