22 Jul 2020
Posted in Insurance
Range of German insurers will struggle under tougher lockdown measures for Europe’s largest economy, says GlobalData
Germany’s export dependent economy has been hit hard by lockdown, which will see insurance GWP growth diminish as claims are set to rise, according to GlobalData, a leading data and analytics company.
GlobalData forecasts the overall German insurance industry GWP to increase in 2020, despite the disruption, but at a much lower rate than in the company’s pre-COVID-19 forecasts.
GlobalData insurance analyst, Deblina Mitra, comments: “We expect premiums to rise by 0.2% in 2020, compared to 2.6% previously, and growth is expected to recover slightly in 2021, but only to 1.8%, compared to 2.7% previously.
“Approximately 10% of the German population carries private health insurance covering basic statutory health cover. This means that private insurers will need to bear all the treatment and related costs associated with the disease. Credit insurers are also expected to suffer as they will be hit hard by economic vulnerabilities and bankruptcies.”
Life and health insurers are expected to report more claims, while general insurance claims will depend more on policy wordings. Since COVID-19 was officially declared a pandemic on March 11, travel insurers excluded any trip booked or commenced from that day.
Mitra concludes: “One area where premiums are predicted to rise is in nascent pandemic cover. Business interruption claims are expected to remain limited, as pandemics are typically excluded in standard business interruption cover. Additionally supply chain failures are also excluded and they explicitly exclude unnamed risks. Therefore, the life, health and travel markets are expected to be the hardest hit in Germany.”