Flood damage appears to be the Achilles' heel of insurers.

For the first time since 2013, a year also characterized by heavy rain, private insurers made losses in 2021.

Last summer, images of devastated towns and villages shook the entire country.

The German Insurance Association (GDV) estimates the insured damage from the flood disaster at EUR 8 billion.

In this context, Wolfgang Weiler, President of the GDV, calls for political steps to “adapt the consequences of climate change”, which insurers can supplement with products for homeowners.

Limiting climate change is important.

In addition, however, society must also be armed against extreme weather.

Gregory Bruner

Editor in Business.

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Together with further damage, including from hailstorms, the bottom line is the most expensive natural hazard year since GDV statistics began in the early 1970s.

12.5 billion euros were incurred from natural hazards for property and casualty insurance.

Overall, the industry recorded an increase in claims expenditure of 20 percent compared to the previous year to 62.3 billion euros.

Premium income, on the other hand, rose by around 2 percent to 76.6 billion euros.

Taking into account the administrative expenses, which are added to the claims expenses, the combined ratio in this area was 102 percent.

"Slightly in the red, but a presentable result in view of the record damage," commented Weiler.

The rate was 129 percent in property insurance and 95 percent in motor insurance.

Stable life insurance

According to the association, life insurance developed stably.

With premium income from new business increasing by 2.6 percent, the number of newly concluded contracts fell by 1.1 percent compared to 2020.

New business with Riester contracts has increased significantly.

Weiler justifies an increase of 12 percent to around 310,000 policies with the customer need to anticipate a reform of subsidized private old-age provision.

Overall, the premium income of life insurers, pension funds and pension funds fell by 1.4 percent to 102 billion euros.

Negative interest rates are increasingly noticeable in life insurers' capital investments.

At the end of 2020, the total share of bonds in the portfolios was still around 82.5 percent.

At the end of September 2021 it was only around 81 percent.

Despite the ongoing corona pandemic, the GDV is satisfied with the development of private health insurance.

In 2021, premium income increased by 5 percent to 45 billion euros.

Of this, 4.5 billion euros was attributable to long-term care insurance, an increase of 7.3 percent.

The insurance benefits paid out by private health insurance companies increased by 2 percent.

Pandemic damage as a bone of contention

Combined, the GDV posted premium income in all segments of 1.1 percent higher at 223.4 billion euros.

Benefits increased by 8.4 percent to 180.3 billion euros.

In 2022, GDV expects revenue to grow by between 2 and 3 percent.

The industry will continue to be concerned with insuring damage caused by closures ordered during the pandemic.

“The insurance principle is suspended in a pandemic.

Almost all insured persons are affected in this situation at the same time.

Pandemics can only be borne jointly by the private sector and the state,” is Weiler’s thesis.

Nevertheless, there are still disputes about the scope of insurance cover.