BdV Science Conference: How the pandemic will continue

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The lockdowns have significantly changed forecasts of the impact of the pandemic on the insurance industry. “We have a lockdown that we never expected in spring 2020 and again at the end of 2020 in Europe.”

That said the actuary Zoran Nikolić from the Deloitte GmbH auditing company on Thursday at the virtual science conference of Association of the Insured (BdV).

Statutory pension benefits from the pandemic deaths

Therefore, the risk researchers had to correct their forecasts. For life and health insurance, it now applies that the deceased are predominantly elderly. They would die an average of nine years earlier from the pandemic.

That does not lead to any particular mortality risk. According to the experts, statutory pension insurance benefits from this development by a few percentage points.

The containment measures in Europe would have slowed down the diseases overall and reduced mortality. The expected mortality shock would not have occurred.

Impact on new business is still difficult to assess

The effect on new business is still difficult to assess. In the discussion, however, it became clear that at least private health insurance is currently benefiting from the pandemic through increased business.

In property and casualty insurance, the lower costs in car insurance also outweigh the additional costs in business closure and event insurance.

The problem of low interest rates has intensified on the capital market. At the same time, the share development is positive.

The insurance companies worked largely without any disruptions.

Zoran Nikolic, Deloitte

Insurers work almost without a hitch

Due to the containment measures taken and the predominant switch to home office, there would have been no increased loss of work in the insurance company. “The insurance companies worked largely without any disruptions,” said Nikolić. Predicting the course of the pandemic would remain very difficult.

“Apparently small measures can change the course significantly. Countries that had reacted very early to exponential growth would have gotten through the crisis better.

It is also unclear how the third wave will actually run. So it is uncertain whether there will be another hard lockdown. The number of people vaccinated weekly in Germany could also fluctuate between one and five million. “There is still a possibility that the death rate will rise sharply,” warned Nikolić.

Stress from corona burn-out

Axel Kleinlein (archive photo: Schmidt-Kasparek)

BdV spokesman Axel Kleinlein expects the occupational disability insurance to be highly exposed to the pandemic. “Reinsurers have confirmed to me that many people who have recovered from the corona infection show signs of fatigue that are similar to burn-out.”

According to the consumer advocate, many people are currently much more concerned with insurance. They seem to have more time and would check their contracts and their insurance more closely.

In addition, there would be a lot of uncertainty among consumers due to the pandemic. For example, they are concerned with whether the travel or occupational disability insurance pays for Corona and whether the car insurance does not have to reimburse money because you drive less car.

The situation in life insurance, on the other hand, is currently difficult to assess. The minus of twelve percent in new business, which the industry is pushing on to failed consultation appointments, could also result from the fear of the negative economic development.

Interest rates could rise after the corona crisis

“Interest rates will remain extremely low for a long time to come,” said Dr. Klaus Wiener, economist and former managing director of the General Association of the German Insurance Industry eV (GDV). This development has now been accelerated by the corona crisis.

Corporate insolvencies would rise in the summer months in the sectors in which the pandemic had hit particularly.

After the crisis, however, the economist expects that long-term investments could achieve higher interest rates. “There can be a difference of one or two percentage points here,” said Wiener.

The expert also sees opportunities for “New Classic” life insurance products. Young people with a savings horizon of 30 to 40 years could have prospects here through alternative investments.

Image problem company closure insurance

Christian Armbrüster (archive image: Schmidt-Kasparek)

The industry still has an open image problem with the dispute over the business closure insurance (BSV). According to Professor Dr. Christian Armbrüster from the Free University of Berlin The many processes show that it is absolutely necessary to reach fundamental decisions more quickly.

He sees great damage to the image of the insurance industry. Because in public the dispute would lead to many customers doubting the utility of insurance products.

Therefore, the dispute over the FSIO would also affect consumer protection in general.

The lawyer assumes that no insurer would have intended to cover the risk of a Covid-19-related area-wide official closure of the company.

Armbrüster only sees the new AVB as transparent

But this goal has not been implemented legally correctly in numerous sets of conditions used on the market. Everyone could see that transparency is possible in the new model AVB for business closure insurance, which the (GDV) has now published on its homepage.

At the moment, the numerous instance decisions on various types of AVB would largely be at the expense of the policyholders and only partially in their favor (March 22, 2021).

However, the lawyer expects the first decisions by the Federal Court of Justice (BGH) in autumn 2021. “I assume that the BGH will make fundamental statements, but that several decisions will be necessary,” said Armbrüster.

The scientist finds it very surprising that some insurers later refused cover even when commercial customers asked about existing contracts whether Covid-19 was also insured and received positive information. “These customers naturally have good cards in proceedings,” says Armbrüster.

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