sueddeutsche.de
German Car Insurance Prices Surge 43% Due to Repair Cost Increases
Due to rising repair costs, German car insurance prices increased by 43 percent from fall 2022 to the end of 2022, with further increases expected this year, though insurers anticipate profitability by 2025.
- How are reinsurers responding to the increased risk and claims from car insurers?
- Reinsurers raised prices for catastrophe cover by around 30 percent at the beginning of 2023 due to poor operating results and high catastrophe losses. They've also increased deductibles, reducing their coverage for smaller, more frequent claims, thus shifting more risk and costs back to the primary insurers.
- What is the primary cause for the significant increase in German car insurance premiums?
- The main driver for the 43% surge in German car insurance premiums from fall 2022 to end of 2022 is the sharp rise in the cost of car repairs, stemming from increased prices for spare parts and workshop services.
- What are the potential long-term implications of the current market dynamics for car insurance consumers and the insurance industry?
- While insurers anticipate profitability by 2025 and some price decreases in 2026 for short-term contracts, the reinsurers' unwillingness to deviate from stricter contract terms and their reduced coverage for smaller claims may lead to continued pressure on car insurance premiums for consumers. The reduced role of reinsurers also presents a significant long-term challenge to the industry's risk management model.
Cognitive Concepts
Framing Bias
The article presents a balanced view of the rising car insurance prices, outlining both the challenges faced by insurers (rising repair costs, hailstorm damage) and their improved negotiating position due to increased prices for catastrophe coverage. While it highlights the insurers' profits and positive outlook, it also mentions challenges like rising healthcare costs for accident victims and the heterogeneity among insurers, preventing a one-sided narrative.
Language Bias
The language used is largely neutral and objective. Terms like "stark verteuert" (strongly increased) could be considered slightly loaded, but the overall tone avoids sensationalism or emotional appeals. The use of quotes from experts adds credibility and avoids biased interpretation.
Bias by Omission
While the article provides a comprehensive overview, it could benefit from including specific examples of how rising repair costs and healthcare costs impact insurance payouts. Also, mentioning specific insurers' names beyond Allianz and Ergo, alongside their financial performance, would enhance transparency. The article also omits discussion of regulatory factors that may influence pricing.
Sustainable Development Goals
The article discusses significant increases in car insurance premiums (43% since fall 2022), impacting affordability and potentially exacerbating financial inequalities. While not directly targeting inequality, the increased cost of essential services like car insurance disproportionately affects lower-income individuals and households, widening the gap. The increase is driven by factors including rising repair costs and increased claims, highlighting systemic issues that contribute to economic disparities.