German insurers remain ‘stable’ despite financial crisis: GDV
Risk managers assured over health of carriers
Driven largely by high equity ratios, the German insurance industry remains in a “comfortable and secure” position despite current volatility on the financial markets, according to the German insurance association GDV.
“German insurers are very stable,” said Jörg Asmussen, general manager of the GDV in a statement.
“Our calculations show that companies have sufficient equity to cushion financial market fluctuations and high inflation,” he added.
At the end of 2022, German life insurers were well equipped with their own funds. “The solvency ratios averaged 510% to 530%,” said Asmussen.
“Customers can rely on insurers to meet their obligations even under adverse conditions,” said Asmussen. Customer trust is also reflected in the persistently low cancellation rate, he said.
In P&C insurance, the solvency ratio was at 270% to 280% at the end of 2022. This is in line with the previous year’s level of 277%.
The non-life ratio was boosted by higher prices enjoyed by the insurers. Higher interest rates have also helped support German insurers’ provisions.
A solvency ratio is the ratio of own funds to the solvency capital requirement (SCR). With a solvency ratio of 100%, insurers could meet all their obligations even in a theoretical crisis scenario that only occurs once in every 200 years, explained the GDV.
