The total surplus of property insurers increased significantly in the past year, said Dennis Wittkamp from the rating agency Assekurata. The bottom line is that insurers saved 1.3 billion euros as a result of the pandemic. That drove the underwriting profit of the industry up to 7.4 (2019: 5.2) billion euros. “The industry has come through the crisis more than well,” said the insurance expert.
While the premiums rose by 2.1 percent to 74.8 billion euros despite the problems in sales during the lockdowns, benefits fell by 2.5 percent to 53.3 billion euros – mainly because motorists were significantly less due to the lower traffic Reported damage. The accident and liability insurers also had to spend less to settle damage, and many industrial insurers were harder hit because of the forced closings.
The Assekurata analyst expects the trend to continue in 2021: He estimates premium growth at 2.5 percent, but claims payments are likely to remain below the level before the pandemic this year, too, said Wittkamp.
He expects increased price pressure in motor vehicle insurance, for example, after the industry leader HUK-Coburg reimbursed 190 million euros in contributions to motorists due to the lower damage. That puts other insurers under pressure. The premiums could crumble by two to three percent, said the expert. According to industry data, motor insurers had to do nine percent less in 2020 than in 2019. At the same time, they had collected most of the premiums in advance at the beginning of the year, when the pandemic was not yet foreseeable.
Wittkamp said that the insurers had suffered damage to their image through their stance on business closure insurance. Restaurants and hotels were left empty-handed because most insurers insisted that compulsory closures to prevent infections were not covered by the policies. According to a survey by the Free University of Berlin, they would have won 80 percent of the 120 court cases in the first instance. Many had avoided a judgment but also through out-of-court settlements, said Wittkamp. The industry urgently needs to ensure more transparency in terms of conditions.
(Reuters)
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