The general insurance industry in Germany is set to grow at a CAGR of 5.5% from EUR149.7bn ($152.8bn) in 2023 to EUR195.5bn ($205.2bn) in 2028.
This is according to GlobalData and its insurance database which also revealed that Germany general insurance is expected to grow by 5.4% in 2024. The growth is supported by an increase in motor vehicle sales, rising demand for natural catastrophic (nat-cat) insurance policies and an inflation-led rise in premium rates across most general insurance lines.
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Sneha Verma, insurance analyst at GlobalData, commented: “The growth rate of Germany’s general insurance industry is expected to remain consistent between 5-6% during 2023-28. It will be primarily supported by health and property insurance, driven by the post-COVID-19 pandemic increase in health awareness and increasing demand for nat-cat insurance policies.”
In addition, personal accident and health insurance (PA&H) is the leading line of business, accounting of 37.7% of the general insurance market in 2023. It is also expected to grow by 3.8% in 2024 and 4.2% in 2025, boosted by an increase in health awareness after Covid-19.
According to the German Insurance Association, private health insurance premium is expected to increase by 4% to 5.5% in 2024. PA&H insurance is projected to grow at a CAGR of 4.4% during 2023-28.
Furthermore, motor insurance is the second largest line of business, accounting for a 21% share of the Germany general insurance DWP in 2023.
Motor insurance DWP grew by 1.8% in 2023, supported by an increase in total vehicle sales. According to the Federal Motor Transport Authority, vehicle sales increased by 7.2% to 2.84 million in 2023 from 2.65 million in 2022. The trend is expected to continue in 2024.
Verma added: “In addition to vehicle sales, an increase in premium prices due to inflation will also support motor insurance growth. An extended period of high inflation has resulted in an above-average increase in spare parts and repair costs, leading to a higher cost of claims. This has impacted insurers’ profitability, leading to the combined ratio for the motor insurance industry surpassing 100% in 2022 for the first time in the last 10 years. Motor insurance is expected to grow at a CAGR of 2.2% during 2023-2028.”
