Opinion divided over swift return to soft German market

The German industrial insurance market hardening has peaked for most risks with things calming down for buyers and even easing in some lines, agreed experts at the GVNW Symposium. But they were divided over whether things will start to soften in the next couple of years. Speaking during the closing panel debate, Oliver Cullmann, managing director at broker Krose & Co, said German buyers are emerging from the truly hardening market phase and there has been some “slight easing”, notably in D&O and liability. But he warned that the property market remains difficult and continues to harden. “Property is still reaching its peak and premiums will probably increase further,” said Cullmann. Michael Feifel, global head of corporate insurance at construction firm Hochtief, agreed there has been some easing in the market for certain industries and risks, particularly from a capacity perspective. He said there has been some “significant” capacity increases in some lines. Feifel added that the market remains dislocated and described it overall as a “heterogenous picture”. Fellow buyer Patrick Fiedler, GVNW chairman and senior vice president of insurance at chemicals giant BASF, said that things are more positive for buyers after the hard market phase. He believes that a new premium level has been reached and thinks increases are now pretty much done. Fiedler said there is better communication from insurers, a better tone and things are being done faster. The insurance representatives on the panel also said the severe market hardening is over. “I think we have reached a peak,” said Anja Käfer-Rohrbach, deputy CEO of the German insurance association GDV. Hans-Jorg Mauthe, managing director of Allianz Commercial for the DACH region, said the market is “calming down” after the difficulties over the past few years. He said cyber and D&O in particular are “clearly calming”. “Things are significantly different than 2019 and 2020,” said the insurer. But while there was broad agreement that, potentially barring property, the market hardening phase is over, there was disagreement as to whether this will be swiftly followed by softening. GVNW president Fiedler thinks the market will start to soften sometime soon but hopes future cycles won’t be as extreme. “We will see fresh capital. Also, I think we will see good results as insurers. So, I think we will have a soft market…hopefully not too soft but down from current levels,” he said. Käfer-Rohrbach predicts there might be a “slight decline” in the rating environment over the next two years, but doesn’t think insurance buyers will see a big softening. On the other hand, Allianz’s Mauthe does not think that current premium levels will fall over the next couple of years because insurers better understand the technical price of their risks so won’t be as swayed by market forces. “I don’t think things will happen so quickly going forward,” he said. Insurance manager Feifel doesn’t think the market will be soft in two years’ time because the underlying risk environment will not ease in that time frame. And Georg Winter, CEO of GrECo International, said, based on history, the market should soften, but, he is not so sure given the spate of big and systemic risks. For him the question should not be whether the market will soften but whether it can come with new solutions so the whole range of risks remain insurable.

Opinion divided over swift return to soft German market

German market peaked with easing in some lines

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