Best’s Market Segment Report: AM Best Maintains Stable Outlook on Germany Non-Life Insurance Market

AMSTERDAM–(BUSINESS WIRE)–AM Best has maintained a stable market segment outlook on
Germany’s non-life insurance market, supported by key factors that
include solid rate adjustments in core business classes that are keeping
pace with claims inflation, thereby supporting robust technical
profitability, and strong balance sheets among market participants,
which are positioning them well to withstand potentially challenging
market dynamics. Despite the stable outlook, AM Best notes a slowdown in
the economy and persistently low interest rates remain challenges to
non-life insurers.

A new Best’s Market Segment Report, titled “Market Segment
Outlook: Germany Non-Life”, states that economic expansion in Germany is
anticipated to weaken in 2019, which likely would temper growth in the
non-life insurance market. Still, AM Best expects profit margins of
Germany’s non-life insurers to remain robust, supported by sound rate
adjustments. Motor and property insurance, Germany’s two largest
insurance lines of business, accounting for approximately 70% of total
non-life premiums, saw rate increases in 2018 of approximately 3% and
4.5%, respectively.

The impact of adverse weather events will continue to contribute to
market performance volatility over the long term, as natural catastrophe
risk in Germany is considerable, and insurers tend to retain a high
proportion of retail risks. In 2018, natural catastrophes, mainly
windstorm and hail events, resulted in insured losses of approximately
EUR 2.7 billion for property risks, which was the highest annual amount
since 2013. Germany’s non-life market maintains a robust level of
capital adequacy, helped by good retention of earnings. In AM Best’s
opinion, the market continues to be well-positioned to withstand
challenges that may arise from increasing competition and natural
catastrophe losses. Surplus capital provides a buffer to adverse
performance, and a continuous focus on enterprise risk management, due
in part to the implementation of Solvency II, has led to an improvement
in the control and oversight of key risks.

AM Best expects insurers to continue to focus on underwriting operations
in their quest to strengthen profitability. Nevertheless, a shift from
the current muted investment environment that positively impacts
earnings could lead to a corresponding decline in underwriting
discipline over the longer term. Additionally, capital market volatility
could also influence overall performance.

To access the full copy of this market segment report, please visit

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
for more information

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its


Konstantin Langowski
Financial Analyst
+31 20
308 5431


Senior Director, Analytics
+31 20 308 5421


Director, Research, Communications
& Media
Europe, Middle East & Africa
+44 20 7397 0322


Director, Market Development &
20 7397 0280

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