The war in Ukraine lowers German insurers' growth expectations for 2022

31 March 2022 — Daniela GHETU
German insurers expect a 2.5% increase in the total GWP in 2022, GDV General Manager Joerg ASMUSSEN stated, pointing out the fulfilling of this expectation largely depends on the further developments in the Ukraine war. If the war escalates further, growth is likely to be weaker.

German Insurers Association's expectations for 2022 were better before the start of the war in Ukraine at the end of February: 3% for the entire sector and up to 2% for life insurance, reflecting a strong recovery effort. In 2021, German insurers posted a premium increase of 1.4%, to EUR 225 billion across all lines. Given the economic impact of the war, however, the 2022 forecast was lowered to 2.5% overall growth and less than 1% for the life insurance sector.

One if the main effects of the war situation is the weakening purchasing power of the households, burdened by the much higher prices of energy, increased uncertainty etc. "The general rule is that decisions for long-term provision and insurance tend to be postponed in times of crisis," said ASMUSSEN, quoted by the GDV website. "We were already able to observe this phenomenon after the outbreak of the corona pandemic."

As for the direct effects of the Ukraine war on the German insurance industry, the association assesses it as minor, as the current edition of its publication "Fokus Markt" shows. They are currently limited in particular to transport and credit insurance. In some cases, war exclusions also applied here. A consequence of the war is also an increasing risk of cyber attacks, "which could lead to additional claims for companies insured in Germany". So far, however, no increased damage has been recorded in the area of cyber insurance.

Source: GDV website

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