German insurer calls for reduced red tape to combat extremism

Norbert Rollinger, CEO of Wiesbaden-based R+V Versicherung, has called for “urgent political action” to improve economic conditions and prosperity to help curb extremism and strengthen democracy at a time of economic downturn and rising support for the far right in Germany.

Rollinger made his call as he revealed a decent set of results for 2023 but also falling sales as the economic downturn in Germany continues.

In February, economic minister Robert Habeck said the German economy is in “troubled waters” and the government’s forecast for economic growth for this year was downgraded from 1.3% to a mere 0.2%.

Cynics may say, however, that Rollinger chose to stray out of the normal remit for an insurance company CEO at this stage to deflect media attention away from the group’s links to the Austrian real estate group Signa that dramatically collapsed with billions of debts.

Whatever the reasoning behind Rollinger’s comments, clearly stumbling economic growth is not good for the insurance market outlook.

“Maintaining competitiveness and prosperity in our country requires a concerted effort and the solidarity of all democratic parties. Business and citizens want stability and reliability. This creates a positive climate for innovation, investment and willingness to consume,” said Rollinger.

“The reduction in and over-regulation is long overdue. All of this prevents extremist forces from gaining strength. We clearly position ourselves against any form of extremism and exclusion in politics as well as in public discourse. The fact that hundreds of thousands of people across the country are taking to the streets, including many colleagues, and standing up for diversity and democracy is an important, strong sign,” he added.

Rollinger said that like the entire insurance industry, R+V had to deal with a continued challenging environment in 2023 that was dominated by crises, war and high inflation.

All of this has made R+V’s business more difficult in various ways, he said. “Despite the adverse conditions, we ended the 2023 financial year with a very good result overall,” he said.

The group actually ended the 2023 financial year with earnings before taxes (IFRS) of €933m. The main reason for the strong increase in earnings compared to the previous year was the investment result of €3.5bn.

In the previous year, market valuation effects as a result of the sharp rise in interest rates led to a negative investment result.

Rollinger was reportedly not keen to talk about the insurer’s ill-fated investment in the Signa group. But he noted that as one of the Signa Group’s investors, R+V is also “affected” by its insolvency. “I would like to expressly emphasise that, looking back, we regret our Signa investment and have learned from it. In this way, we sharpen our risk parameters when investing,” explained Rollinger. “We have fully processed the Signa commitment in our 2023 annual financial statements. This shows that R+V is in a very solid financial position,” he added.

R+V Group generated €19.8bn in premium income in 2023, 1.5% higher than the previous year of €19.5bn. This means that R+V returned to growth after a decline in 2022.

While P&C business grew by 5.6% and health insurance by 6.7%, R+V recorded a decline in life and pension insurance in the continued difficult market environment.

The group’s reinsurance business was particularly successful in 2023, with a premium increase of 5.6%, said Rollinger. The group’s Italian R+V subsidiary Assimoco achieved strong double-digit growth of 13.6%,  thanks to an expanded sales partnership with the cooperative banking organisation in Italy.

The group said that 2023 was primarily characterised by small and medium-sized natural hazard events, especially in the second half of the year. The total loss volume in 2023 amounted to €390m, up from €311m in 2022. In 2021, the Ahrtal flood resulted in damage expenses of more than €1bn at R+V.

Total claims expenses in P&C insurance amounted to €5.3bn in 2023, around 10% higher than the previous year. The reason for this was continued high inflation, which drove up the costs of repairs and spare parts, said the group.

This was particularly noticeable in its largest P&C line – motor vehicle insurance. With a premium volume of €2.8bn and more than five million insured vehicles, R+V is the third largest provider in the German market.