by Notker Blechner
Status: 11/11/2020, 6:36 a.m.
The price war has started: these days, motor insurers are using special offers to attract customers who are willing to advertise. Drivers can cancel their policies until the end of November. This year, changing insurance should be particularly worthwhile – because of Corona.
Good news not only for accident statisticians: Because many citizens work in the home office and leave their car behind, the number of accidents on German roads has dropped dramatically. According to calculations by Hannover Re, the number of claims fell by 16 percent in the first half of the year alone. For 2020 as a whole, Andreas Kelber, Head of Hannover Re’s German motor vehicle business, expects twelve percent less damage than in the previous year. Market leader HUK-Coburg is assuming a five percent lower level of damage.
Corona brings record profits to car insurers
This saves insurers hundreds of millions in payments. You can therefore expect a record profit for 2020. Hannover Re expects the auto insurance industry to generate annual earnings of 2.2 billion euros. In 2019 the profit was only 0.4 billion euros.
Motorists benefit from this development: premiums are falling for the first time in years. By July, the average premium in motor vehicle liability insurance fell by 0.8 percent, and in fully comprehensive insurance even by 1.9 percent, Hannover Re recently announced.
Individual insurers receive premiums back
HUK-Coburg has already promised its customers to reimburse part of the contributions. “If the damage continues to be cheap, we will let our customers participate in the cost savings – according to current estimates that will be significant,” said a spokeswoman to boerse.ARD.de. How high the premium refund will be, she left open. The offer is only valid for HUK customers who do not switch to the competition. “The premium reimbursement will only be given to those who were insured with us in 2020 without damage and who will continue to be customers at least until the specific amount is determined in spring 2021,” explained a spokeswoman.
Allianz has also announced that it will relieve its customers and allow them to participate in the more favorable claims experience. Frank Sommerfeld, head of property insurance at Allianz Germany, made it clear in the spring that those who drive less have to pay correspondingly less premiums.
The exceptional Corona situation is likely to fuel the price war among motor insurers even more. According to calculations by the comparison portal Check24, the average price for a liability policy fell from EUR 337 in July to EUR 303 in October.
Further price reductions in the changing season
In the changing season, which traditionally reaches its peak in November, prices could fall further. With large advertising and marketing campaigns, insurers are vying for new customers. For example, Allianz Direct, Allianz’s new online insurer, is offering its existing customers a recommendation premium of up to 300 euros.
“This autumn, car owners have even more reasons than usual to check their car insurance,” says Stiftung Warentest. Thanks to the reduction in accidents, insurers have been able to save costs and now have more flexibility in terms of monthly premiums. The consumer protection organization speaks of a savings potential of several hundred euros with comparable services.
The analysis company Franke und Bornberg has determined the best tariffs. In the current rating, 13 products received the top grade FFF + (excellent).
Cost savings are also possible without changing
Motor insurance costs can also be reduced without switching. For example, if you pay the entire policy in one fell swoop rather than monthly, you save ten percent money. And if you drive the car yourself and don’t share it with other family members, the policy is also cheaper. Owners of older vehicles (over twelve years of age) should consider whether comprehensive insurance still makes sense. In addition, the costs can be reduced by ten to 20 percent for tariffs with workshop commitment.
Telematics tariffs can also pay off for cautious drivers. Here, the insurers grant discounts of ten to 30 percent. The price for this: the driver is monitored. He must have a digital sensor installed in the car or a mobile phone app to check the driver’s driving style.
In 2021, the premium reductions for car insured persons could already be over. Then the premiums are likely to rise slightly, at least in existing business, predicts the Hannover Re. As the losses normalize again, the industry is likely to slide back into the red.
Changed mobility needs are putting insurers under pressure
The increasing car sharing, the trend towards e-mobility and the ever closer vision of autonomous driving could shake the business model of the classic car insurers in the future. When more and more people drive a car they no longer own, new insurance models are needed.
Individual manufacturers such as Daimler have reacted to the changed mobility needs and will in future insure their cars themselves. Movinx, a joint venture between Daimler and Swiss Re, will be offering car insurance when buying a new Mercedes from 2021. The service will initially start in France, but will be expanded to other countries. At some point in Germany too. Daimler would then probably no longer have to negotiate with insurers about the damage class classification of the new semi-autonomous cars and about insurance costs for customers.
If one day the self-driving car should actually establish itself on German roads, the auto insurers could face a significant slump in business. The Association of the German Insurance Industry already estimates that claims expenditure will decrease by up to 15 percent over the next 15 years.
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