German insurance companies' sentiment in Q1
German Insurers' Sentiment Deteriorates Slightly in Q1 2025
The sentiment of German insurers has witnessed a modest decline at the beginning of this year. The business climate index for the first quarter fell by 7.2 points to 18.0 points, according to the German Insurance Association (GDV) following the Ifo Institute's economic survey.
Speaking about the decline, GDV chief executive Jörg Asmussen, stated, "Even insurers are not immune to the economic downturn in the real economy. However, our sector is well-positioned and looks ahead with cautious optimism."
The Munich-based Ifo Institute polled around 150 insurers quarterly about their business situation and prospects. Despite a considerable drop in business expectations, the assessment of life insurers' business situation remains very high, particularly in new business. However, the barometer for business expectations fell significantly by 46.2 points to 0.4 points in the first quarter.
Asmussen attributed this drop to the weak growth outlook for the German economy, coupled with persistent global uncertainty. In property and casualty insurance, decreasing claims numbers have caused a more positive rating of current conditions. However, business expectations are less favorable.
Notably, life insurers' overall assessment remains positive, especially in new business, due to factors such as stable market conditions, growing demand for risk management solutions, and strategic business realignments. Additionally, the motor insurance market has shown improvement, with the combined ratio reducing by 5.3 percentage points to 106% in 2024.
Sources: ntv.de, RTS.
- In an effort to adapt to the economic circumstances and foster resilience, German insurers might consider implementing a community policy that includes vocational training programs to equip employees with necessary skills for various roles within the industry, thereby improving overall business performance.
- To bolster financial stability and attract investments, the German insurance sector could establish partnerships with finance institutions, providing vocational training opportunities to promote a skilled workforce that aligns with the industry's needs, ultimately contributing to long-term business success.
