Lots of claims: German insurers write with managers

The German insurance industry writes deep red numbers with manager liability policies.

According to statistics from the industry association GDV, the loss rate after settlement last year was 110 percent.

The claims expenditure therefore exceeded the premium income by ten percent - the internal costs are not yet included in this.

Although premiums have been rising for years, they are not keeping pace with the growth in claims, for example as a result of the diesel scandal at Volkswagen.

“The bottom line is that there are considerable losses resulting from the ever-increasing liability risks for managers,” said Jörg Asmussen, the general manager of the German Insurance Association (GDV).

The car manufacturer Volkswagen had reached a settlement this year with a consortium of D&O insurers (D&O stands for Directors & Officers), according to which they will pay 270 million euros for the misconduct of the former VW management around Martin Winterkorn.

Contribution volume of 560 billion euros

The GDV estimates the premium income of its members from manager liability at almost 400 million euros per year, including foreign providers, the premium volume is around 560 million euros. With D&O policies, companies protect their managers against liability claims. The largest providers include Allianz, Talanx (HDI-Gerling), R + V Versicherung and the US-American AIG.

Asmussen pointed out that, for example, insolvency administrators are increasingly making multi-million dollar claims against the managing directors after corporate bankruptcies. The higher regional court (OLG) Frankfurt had decided that the manager liability insurance (D&O insurance) had to pay for the legal fees of the former Wirecard boss Markus Braun. Even in healthy companies, the demands placed on managers continued to rise, for example through the supply chain law and an internal whistleblower system, said Asmussen.