Insurance: Public insurers under pressure – but working together is proving difficult — NewsyList

Frankfurt, Munich The sharply rising costs could lead to mergers among public insurers. According to the rating agency Fitch, many providers are under increasing pressure to generate earnings. Against this background, small public insurers in particular could be forced to merge and close down.

The public insurers are the silent giants in Germany’s insurance market. If all the insurers in the Savings Banks Finance Group operated under one roof, the annual gross premium income would be 24 billion euros. The insurers of the savings banks would thus be the second largest player in Germany after Allianz and even ahead of Ergo.

But mostly they operate independently. For the Fitch experts, this is not very efficient. The insurers are not making sufficient use of potential synergies, they complain. Instead, they all struggle with the same cost increases and falling margins.

The Fitch experts see major challenges in non-life insurance in particular. Inflation drives up costs, experts speak of “claims inflation”. Building insurance, where public insurers traditionally have a high market share, is particularly affected.

In addition, the reinsurers, with whom the public insurers hedge, have increased their prices sharply. This can only be compensated for slowly. “They can only gradually push through premium increases, especially in private customer business,” says Fitch analyst Christoph Schmitt.

Insurers themselves consider themselves to be in a good position

The public insurers themselves reject the criticism of the rating specialists. “In contrast to Fitch’s opinion, the public insurers certainly expect a gradual compensation for the increased reinsurance premiums through adjustments to the premium level,” according to the Association of Public Insurers (VOEV). The Versicherungskammer Bayern (VKB) – the largest group of companies in the sector – negotiated with reinsurers at an early stage, emphasizes a spokeswoman.

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There was also a lack of understanding in Stuttgart at SV Sparkassen Versicherung, the third-largest public insurer in terms of premium income. “We feel we are well positioned in homeowners insurance and in general.”

The public insurers therefore see no pressure to consolidate for the time being. It would have to come from their carriers anyway. For almost all public insurers, these are the savings banks, state banks and regional associations as well as the regional savings banks and giro associations. But here, too, the Fitch criticism is not shared. Instead, as with the Bavarian Savings Banks Association, a sponsor of the VKB, reference is made to a different Fitch rating. This has just given the insurer an excellent rating.

Insurance: Public insurers under pressure – but working together is proving difficult — NewsyList

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