BERLIN (dpa-AFX) - High prices for car repairs have significantly eroded the profits of German insurers in 2023. Because motor vehicle insurance was in the red, the underwriting profit in property and casualty insurance as a whole fell by more than half to 1.5 billion euros, as the German Insurance Association (GDV) announced in Berlin on Thursday. For the current year, the association therefore expects a further increase in premium income - especially in motor vehicle insurance.

In the past year, the total premium income of German insurers rose by 0.6 percent to just under 225 billion euros, according to the information. While income in the property and casualty business grew by 6.7 percent to 84.5 billion euros, it fell by 5.2 percent to 92 billion euros in life insurance. The association explained that single-premium life insurance policies in particular were less in demand due to the difficult overall economic situation. In the property and casualty business, meanwhile, the claims amounts rose by 12.7 percent, significantly more than the premiums.

GDV was more optimistic for the current year. In life insurance, the association predicts that the rise in interest rates and thus higher profit participation should halt the decline in premiums. Overall, it is predicting a 3.8 percent increase in premium income for the insurance industry - driven by the property and casualty business with an increase of 7.7 percent.

Car owners in particular are likely to have to dig deeper into their pockets. Last year, higher prices for spare parts and repairs resulted in high losses for motor insurers. "Every euro received was offset by expenses of 1.10 euros," said Norbert Rollinger, head of the association. Expenses for claims, administration and sales exceeded premium income by 2.9 billion euros. The association expects a further increase in repair costs in 2024. According to his estimates, motor insurers are likely to increase their premium income by ten percent.

According to GDV estimates, the widespread flooding in Germany from Christmas onwards will cost the insurance industry around 200 million euros. GDV Managing Director Jorg Asmussen accused the federal states and local authorities of deficits in prevention: "Many problems, especially in flood protection, are home-made and could have been prevented."/stw/tav/mis