Motor vehicle and other insurance are becoming more expensive again. Price-determining factors are mainly inflation and natural disasters. For example, prices for spare parts have risen and insurers in turn pass these higher costs on to customers.
Inflation in car insurance is unfortunate for the entire insurance industry. Companies’ expenditure on car repairs and other damage is expected to exceed their income by around 2.5 billion euros this year. The world’s largest reinsurer Munich Re announced on Thursday that it expects higher prices for customers.
Primary insurers such as Allianz or Generali take out insurance themselves to be prepared for unexpectedly high losses. Munich Re and other reinsurers are taking over this company. When they raise prices, customers may not immediately feel it, but primary insurers are eager to pass on higher costs.
Damage caused by natural disasters
According to Munich Re, at least seven natural disasters have occurred in Europe this year with insured losses exceeding one billion euros each. Both the number and severity of individual disasters are increasing. Examples include hurricanes, thunderstorms, floods and forest fires. “The trend is accelerating,” says Clarisse Kopff, board member responsible for Europe.
Moreover, the consequences of political and economic discontent can also be costly. “In addition to geopolitical conflicts, we are seeing a higher level of social conflict, i.e. strikes, riots and internal unrest,” Kopff said. She cited the summer riots in France as an example. Entire regions were affected.
The failure of critical infrastructure is not included
“We believe most risks are insurable. “The failure of critical infrastructure, such as the failure of the internet, and cyber war cannot be assured,” said German boss Claudia Hasse. War is generally excluded from any coverage. However, there is cyber insurance that can cover business interruption, for example.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
