08 Apr 2020
Posted in Insurance
German life and health insurance sector to take brunt of claims spike, says GlobalData
The German life and non-life insurance sectors are expected to see slower gross written premium (GWP) growth post-COVID-19, but a sharp rise in life and health insurance claims will see those sectors struggle with profitability, says GlobalData, a leading data and analytics company.
GlobalData’s Covid-19 Impact on the Payments Industry: Germany Forecast Snapshotreport shows that the total insurance market in the country is forecasted to increase at a compound annual growth rate (CAGR) of 1.9% to 2023, which is revised down from 2.7% before the impact of the coronavirus.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “The bigger issue for insurers will be the sharper increase in claims. Life and health insurers are expected to report more claims, while general insurance claims will be dependent upon policy wordings. Around 10% of the population carries private health insurance covering basic statutory health. This means that private insurers will need to bear all the treatment and related costs associated with the disease.”
However, insurers will not simply be able to raise premiums to offset losses, as consumers will have less disposable income following a likely recession. Therefore the slowed growth of GWP is a concern for insurers.
Mitra continues: “One area where premiums are expected to rise is in nascent pandemic cover. Given the growing prominence of the gig economy, developments relayed to pandemic diseases will be a key focus area. Remote access features such as video monitoring and telehealth services are expected to gain a wider role in private health insurance”.