17.03.2015
Business Development

2014 was a good year for the insurance industry

Stable growth in all insurance lines: German insurance companies were able to succeed in 2014 despite adverse conditions. Over the entire sector, premium revenues were up 2.7 per cent, to 192.3 billion EUR. “We have some eventful months and a good year behind us, although conditions were tough,” said Alexander Erdland, President of the German Insurance Association (GDV), in Berlin.

Premium revenues in life assurance climbed 3.1 per cent, to 93.7 billion EUR. Once again, this growth was driven by the single-premium annuity insurance business. Private insurers registered a 0.7 per cent increase in premium revenues, to 36.2 billion EUR. Premium revenues for casualty and accident insurance companies were up 3.2 per cent, to 62.5 billion EUR.

The industry is optimistic about 2015

The insurance industry is cautiously optimistic about the current year. “I am confident that the industry as a whole will be able to stay on track for stable, if very moderate, growth in 2015,” Erdland said. The greatest challenge continues to be the low interest-rate environment. “That we are in a good position based on the data from last year is above all an incentive to continue our hard work,” explained the GDV President.

In Erdland’s assessment, the year 2015 is likely be marked by issues of monetary policy, as well as by the preparations being made by the companies for the new “Solvency II” European supervisory regime: “We’re in the home stretch there. The moment of truth will come in 2016, when the new rules take effect. That’s when theory will be converted into corporate practice.”

Performance of the individual insurance lines

 

1. Life assurers, Pensionskassen and pension funds

The growth in single premiums was once again strong, with a gain of 12.9 per cent, to 29.0 billion EUR. This is consistent with the trend which has continued for some years now: demographic changes are resulting in changing investment behaviour on the part of customers.

The trend in single-premium new business was positive in 2014, unlike the year before, gaining 3.8 per cent to 5.5 billion EUR. The cancellation rate fell again, to a record low of 3.1 per cent, so that the overall situation in life assurance is stable.

Life assurers paid out 85.4 billion EUR to their customers, 6.4 per cent more than in the year before. The total number of life assurance, Pensionskassen and pension fund contracts was 92.5 million at the end of 2014. Accounting for an extraordinary statistical effect, this represents a slight decrease, by 1.4 per cent. “All of this demonstrates that there is a great deal of confidence in life and private annuity insurance,” Erdland said.

2. Private health insurers

Premium revenues for private health insurers were up 0.7 per cent, to 36.2 billion EUR. Of this number, 34.2 billion EUR (up 0.9 per cent) in revenues were earned in health insurance. Revenues in long-term care insurance were down by 2.5 per cent.

Benefit payouts amounted to a total of 24.7 billion EUR (up 1.8 per cent). Of this total, 23.8 billion EUR (up 1.8 per cent) was paid out to customers in health insurance, and 0.9 billion EUR (up 1.5 per cent) in long-term care insurance.

3. Casualty and accident insurers

All casualty and accident insurance lines reported significant premium growth in 2014, with the exception of marine and credit insurance. Revenues in motor insurance climbed to 24.3 billion EUR (up 4.6 per cent) and revenues in property insurance climbed to 17.3 billion EUR (up 3.6 per cent).

At the same time, according to preliminary figures, total benefits were down by 7.6 per cent from 2013, a record-setting year with numerous extreme weather events, to 45.9 billion EUR. This level is approximately even with that of 2012. This meant a decrease of 5.1 per cent in motor insurance and a decrease of 16.2 per cent in property insurance.

After extraordinarily high claims expenditures in 2013, with a technical loss of 2.0 billion EUR, casualty and accident insurers expect a net income of about 3.0 billion EUR in the reporting year. At the same time, the claims expenditure ratio went down noticeably: falling to 95 per cent in 2014 from 103.5 per cent the year before. This is the lowest it has been since 2008.

More:
>> German Version: Gutes Geschäftsjahr 2014 für Versicherungswirtschaft