Gothaer reveals industrial insurance expansion plans as market results improve

Gothaer, the Cologne-based mutual insurance group, plans to expand in the industrial insurance market during the next five years as the German industrial property space finally appears to have turned the corner on the back of falling claims and rising prices. The German Insurance Association (GDV) last month published its annual statistical yearbook. This analysis has made depressing reading for German industrial property insurers in recent times. It was dominated by spiralling claims and horrible combined ratios well above 100%. This year, however, concerted efforts by leading German industrial insurers such as HDI Global, Allianz Global Corporate & Specialty (AGCS), AXA and Zurich to re-underwrite their books and improve claims appear to have finally paid off. Industrial, commercial and agricultural property premiums in Germany rose by 5.5% during the preceding year to €7.3bn in 2019. Claims in the segment fell by 10.5% during the same period and were down to €5.5bn. This led to a market claims ratio of 76.6% last year, down from 89.5% in 2018. Its 2019 combined ratio stands at 97.2%, versus 109.8% in 2018. German risk and insurance managers currently struggling to complete their renewals in a tough market will be delighted to hear that the vastly improved market ratio is tempting carriers such as Gothaer to up their presence. Gothaer Group executive board member and CEO of non-life Oliver Schoeller delivered the expansion plans as he reported decent preliminary figures for the firm’s current financial year, despite the impact of Covid-19. “The Covid-19 influence in the markets and society is meeting a solidly positioned and changeable Gothaer. The group is expected to grow significantly in Gothaer Allgemeine Versicherung AG [non-life] and Gothaer Krankenversicherung AG [health] in 2020. At Gothaer Lebensversicherung AG [life], the industry-standard decline in premiums due to the coronavirus crisis will lead to a decline in premiums. Premium income at group level is expected to rise by 0.1% to €4.53bn,” he said. “Our composite insurer – Gothaer Allgemeine – is defying the crisis and is particularly strong in the corporate customer segment in an improved market environment,” added Mr Schoeller. Gross premiums written by Gothaer Allgemeine are expected to be 3.8% above 2019 levels this year at about €1.9bn, driven by good growth in industrial insurance. The group said the “excellent” underwriting result will overcompensate for issues caused by the Covid-19 crisis. An improved claims environment in motor and, in particular, the low level of natural and manmade catastrophes, have boosted results, especially in industrial property insurance. “We want to build on our strong position in corporate insurance in the coming years and further expand our position as a leading partner for medium-sized companies,” said Mr Schoeller. Gothaer said that its new corporate strategy, Ambition25, will sees the group switch to profitable growth after a phase of consolidation. Gothaer said that by 2025 it intends to be one of the five fastest-growing composite insurance companies. "We have a strong starting point. We have been one of the leading providers in the corporate customer business for 200 years, have a strong and committed sales team and are also close to private customers and know their needs and requirements,” said Mr Schoeller. “In addition, we have achieved a great deal in recent years to increase customer satisfaction and have created a strong financial basis that now gives us scope for investments in the future," he continued. To help achieve growth, Gothaer is aiming to build a completely new customer experience. It will focus on sustainability and be driven by an agile team, embracing digitalisation and supported by the financial strength of the group, concluded the insurer.

Gothaer reveals industrial insurance expansion plans as market results improve

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