As of: March 12, 2024, 3:12 p.m
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Motor vehicle insurers are in the red.
At the same time, customers complain about poor accessibility and inadequate claims settlement.
The Bafin doesn't like that.
Hamm – After an hour and a half on hold, he was thrown off the line, reports a customer on the online portal “Trustpilot” about his car insurance.
Another customer called the hotline after a car accident - but no connection.
“We are sorry that you have not been able to reach the claims hotline (yet),” the insurance company replied.
After 24 hours.
Angry customers and in Bafin's sights: motor vehicle insurers are struggling with problems
The rating portals are full of angry and desperate complaints from insurance customers.
The two motor vehicle market leaders are often mentioned: Huk-Coburg (24.05 million policies with Huk Allgemeine, Huk VVaG and Huk24) and Allianz (13.49 million policies including Allianz Direct, as of the end of 2022).
But other providers from the top ten such as HDI, Axa and Ergo also have problems with customer service.
In the portals, the insurers admit the grievances, including weeks to months of waiting times for letters and emails as well as for payments: “These service times currently differ significantly from our requirements,” it says.
The fact that no one answers in the chat or on the telephone hotline is due to a “seasonal” or “currently very high customer volume”.
The problems in customer service are known to the Federal Financial Supervisory Authority (Bafin).
According to a spokesman in Bonn, they are “in intensive contact” with the insurers.
He doesn't say which ones exactly.
Processing backlog at Huk
However, the authority keeps complaint statistics.
When it comes to motor vehicle insurers, the three Huk companies were in the lead in 2022 (270 complaints), followed by Allianz (107), HDI (72), Axa (58), Generali (45), Ergo (43) and ADAC car insurance ( 32).
The market shares are also reflected here, and only a few affected people report to the Bafin, whose reasons for the complaint are not stated.
But when it comes to accessibility or delays in claims settlement, the financial regulator comes into play, said the spokesman: “We can’t just let that go.”
He answers the question of what Bafin is specifically doing or has already done with the car insurers with a general catalog of measures: “close observation”, “intensive contact”, “the processing [of the problems] is followed up by a reporting system”.
It is not known whether special reporters have now been sent to insurers (as was the case with the Postbank disaster).
Customer complaints, expensive damage, red numbers: The car insurers are wedged in from several sides © Alexander Franz/Imago
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The situation is particularly bad at the Coburg Huk group.
CEO Klaus-Jürgen Heitmann spoke in the “Börsenzeitung” in January of a “bad situation”.
This definitely lies in customer service.
The “Süddeutsche Zeitung” (SZ) reports 300,000 backlogs of mail that accrued during claims processing in the summer of 2023.
Letters and emails were supposed to be processed in a week - instead, customers waited ten weeks or longer.
This Huk dump contains not only motor vehicle cases, but also other cases, such as health insurance.
Minor damage paid on demand
As an emergency measure, the board ordered that minor damage reported by telephone be settled on demand and without inspection - the dump should not grow any further.
This description from insurance circles to our newspaper is confirmed by the SZ research.
Accordingly, the Huk also paid lavish bonuses on wages, overtime and Saturday work and hired new employees.
A Huk spokeswoman draws a conclusion on the success of the costly campaigns: “We have now achieved the service levels we set for ourselves, thanks in part to the great commitment of our employees.”
However, around 100,000 backlogs of mail are still said to be backlogged.
The complaints in online portals continue.
And in addition, CEO Heitmann probably spoiled the working atmosphere in January when he blamed his own people for the crisis and criticized “performance differences [...] between individual employees”.
The Huk: “Internal company information” was “broadcast” and “partly does not correspond to the truth”.
Companies answer critical questions vaguely at best
Are there processing backlogs at other insurers too?
Bafin statistics and online reviews suggest this.
But companies answer this question vaguely at best.
At Allianz - number two in the motor vehicle business - a spokeswoman admits to "usual backlog burdens" from which they were "freed" at the beginning of 2023 and refers to "several new reports of damage" after storms last summer.
To remedy this, they are investing heavily in “digital solutions” such as “automated immediate adjustment” for glass damage.
You are “stable” at your own “ambition level” of “waiting time of less than five working days”.
So little comes out of the representative walls of insurance companies about problems in customer service.
The situation is different when it comes to the financial situation of the motor vehicle division: there are severe losses here.
Industry is in the red
This is shown by the figures from the general insurer association GDV from January 25th.
The key figure is the combined ratio.
It is determined by comparing the amount spent on claims settlement and your own (administrative) costs to the income (premiums).
The fattest year was 2017 with a rate of 54.2 percent - almost half of the income remained with the insurance companies.
The combined ratio then rose and has been over 100 percent since 2022, which means losses.
And with an increasing trend.
The rate climbed from 94.8 (2021) to 101.2 (2022) to 110 percent (2023).
This situation has several reasons.
Initially, the motor vehicle insurers themselves pushed down premiums with a tough price war for customers and market share.
“It’s not a gold mine.
Money is only made through masses here,” says Philipp Opfermann from the North Rhine-Westphalia Consumer Center in Düsseldorf.
The undercutting competition - additionally fueled by comparison portals such as Verivox or Check24 - is definitely in the interests of consumer advocates.
Corona and the war in Ukraine are making damage settlement more and more expensive
At the same time, however, costs are rising.
The “claims inflation” is a stack of effects that have made claims settlement more and more expensive since Corona and the Ukraine war: in addition to inflation, there are supply chain problems, shortages and price increases for spare parts, growing wages, expensive digital technology in cars, increasing medical costs for care of accident victims – and on top of that, more and more cases of damage.
That's why Bafin has been warning about imbalance for some time now: "Long-term red numbers" are "not healthy," said the spokesman.
In December 2022, the financial regulator asked car insurers to pad their reserves and increase premiums.
But they hardly reacted at all;
some even reduced reserves.
The tone then became more emphatic in December 2023: they would “intervene if necessary” – a big gong by Bafin standards.
A number of insurers, including Huk, have now increased their premiums and lost (in this case 100,000) customers.
But further and clearer increases are to be expected.
Bafin is not satisfied with the quota
The companies' losses vary.
Market leader Huk is the only one to give figures: CEO Heitmann (“bad situation”) expects a combined ratio of 114 to 115 percent for this year and admits that reserves are being used.
“In 2026, the Huk-Coburg should be below 100 percent again,” he hopes, according to the “Börsenzeitung”.
The overall market will probably only recover a year later.
Growing market, growing losses
Motor vehicle insurance is a huge market in Germany that is constantly growing.
According to the General Association of the German Insurance Industry (GDV), there were around 70.2 million motor vehicle liability insurance policies in 2023, as well as 33.6 million fully comprehensive and 21.3 million partially comprehensive insurance policies.
Customers paid 30.3 billion euros in premiums.
At the same time, however, insurers are making losses.
According to GDV, the combined ratio, which at a value of 100 percent means a “black zero” and less than 100 percent profits for insurers, has been in the loss range since 2022: the ratio increased from 101.2 percent on average ( 2022) to 110 percent in 2023.
Fully comprehensive policies have been around for a long time and are particularly loss-making (121 percent).
There is only information from 2022 about the competitors. The independent online portal “Versicherungsbote” registered among the top ten providers those with an adequate combined ratio such as Axa (94.37) and LVM (97.49), while the Provinzial was only just profitable (99.76).
R+V (105.68) and DEVK (112.92) were clearly above the average loss of 101.2 percent (2022).
Allianz still did business with 97.39 percent in the automotive division - its subsidiary Allianz Direct, however, had the red lantern here with 131.28 percent.
When asked by wa.de, Munich only said that all Allianz Direct stores combined were profitable again in 2023.
The Bafin does not comment on these figures, but they are not satisfied with rates of 97 percent either: sufficient security would look different.
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