This outlook is predicated, however, on an easing of the restrictions during the spring and some major progress with the vaccination campaign, following what is probably going to be a slow start to the year, said GDV President Wolfgang Weiler at Wednesday’s annual press conference. If that happens, the economic recovery will also continue. “Under these conditions, the insurance sector is looking ahead with cautious optimism”, Weiler said.
Specifically, the association envisages 2 percent premium growth in life insurance for 2021. By way of explanation, Weiler mentioned potential catch-up effects, which would extend to private retirement provision. Property and casualty, on the other hand, is predicted to be more restrained this year with premium growth of about 1.5 percent.
“Following the corona turbulence, we are very happy with the growth figures”
Across all three business lines, insurers posted premium growth of 1.2 percent to EUR 220.1 billion for the past financial year. “Looking back on what was, in many ways, a turbulent and difficult 2020 and the strong year before that, we are very happy with the premium development”, Weiler said. Premium growth in 2019 had been extraordinary at 7.1 percent.
Life insurance was hit hard by the corona crisis, for example through postponed consultations. Accordingly, the number of new contracts fell by a good 12 percent in 2020.
“A vote of confidence in the future viability of life insurance”
Premiums, on the other hand, only receded slightly, having increased by over 11 percent in the previous year. In 2020, life insurers, pension schemes (Pensionskassen) and pension funds posted a 0.4 percent decline to just under EUR 103 billion. Current premiums fell by 1.0 percent to EUR 64.4 billion, while single premiums rose by 0.4 percent to EUR 38.3 billion.
“The fact that we were able to keep business more or less stable across the board is, in our view, a clear vote of confidence by our customers in the future viability of life insurance”, Weiler said.
Motor insurers enabled premium reductions
According to GDV projections, premiums in property and casualty insurance were up 2.1 percent at EUR 74.8 billion. Almost every segment contributed to the weaker year-on-year growth (2019: +3.5 percent). In motor insurance, the biggest sub-line, many insurers enabled their customers to reduce premiums by travelling fewer kilometres. Property, on the other hand, was stable on the whole as the business in key areas, such as household contents or building insurance was not affected by the pandemic.
Claims payments for property and casualty overall were down 2.5 percent in 2020 at a projected EUR 52.0 billion. The two lockdowns we have experienced so far, have been costly in terms of event cancellations and business closures; however, at the same time, there have been fewer accidents on the roads and from leisure activities as well as fewer break-ins, transported goods and, given the suspended duty to file for insolvency, fewer business failures. Moreover, with an expected EUR 2.5 billion in natural disaster losses, the past year was well below the long-term average of EUR 3.7 billion in that category.
Private health insurers post almost four percent premium growth
Premium income for private health insurers increased by 3.8 percent in 2020 to EUR 42.6 billion. Of that sum, EUR 38.4 billion was from health insurance (+1.5 percent). Long-term care insurance accounted for EUR 4.2 billion (+31.2 percent), mainly due to the higher benefits resulting from the legal reforms of the long-term care system.
Insurance benefits paid out by private health insurers were up 0.2 percent at EUR 30.1 billion. Of that sum, EUR 28.4 billion was from health insurance and EUR 1.7 billion from long-term care insurance. The portfolio of full and complementary policies increased by over 600,000 to 36 million.