The collective division for property and casualty business
The separation according to branches when operating insurance is through Section 8 Insurance Supervision Act (VAG) prescribed – the operation of life insurance is to be separated from the operation of other insurance lines. The operation of health insurance is also to be separated from the operation of other insurance lines. This means that all those branches and areas that do not come under life or health insurance are assigned to a third large branch for property and casualty business: the composite business (“Compositum” = the composite).
And the results of this composite division are quite impressive. This is shown by the current “Industry Monitor Composite Insurance 2014-2019” from VERS Leipzig GmbH (in cooperation with Sirius Campus): The overall market posted 73,205 million euros in gross premiums in 2019 – a huge deal.
Largest premium item through motor insurance
The majority of this bonus cake – 45 percent – goes to the composite branch Motor total. The second largest item in the composite portfolio is due to the sum of several smaller branches – the industry monitor summarizes these under “rest”. This includes the important legal protection insurance. But branches such as “fire,“ credit and deposit ”,“ other property insurance ”,“ technical insurance ”or“ transport and aviation ”are also included Rest assigned. In 2019, a remarkable 18 percent of the premiums are due to this collective category.
The third largest item in the composite business is Affiliated home insurance with twelve percent of the bonus cake. Just behind is that Liability with eleven percent as well as the Accident insurance with nine percent. The smallest item is ultimately the one that is extremely profitable Associated household items – they account for five percent of the premiums posted.
Only three companies are in the red
Other key figures also show that good money can be made with the composite business: Only three of the 50 companies examined in the monitor had to show a combined ratio of over 100 percent in 2019 and are therefore in the red in 2019. Are affected DA Deutsche Allgemeine (CR of 102.12 percent), the Bayerische VersVerband (102.73 percent) and – with Allianz Direct – the direct insurer of Allianz (109.40 percent as CR bottom light).
Improved damage-cost balance due to mild weather
The average combined ratio across all 50 insurers was an adequate 92.60 percent in 2019 – an improvement on 2018, when the average CR was 93.85 percent. This was mainly due to a good financial year for the branches of the crisis: Was the average CR of those hit by climate change Homeowners Insurance in 2018 still at 102.21 percent, a milder weather in 2019 made for an adequate 93.74 percent (Versicherungsbote reported).
Also the average CR in the branch Motor total was just pushed below the critical 100 percent market in 2019. Despite the tough price war and rising claims expenses, it was 99.24 percent. However, this does not change the fact that almost every second motor insurer in the largest composite branch was also in the red in 2019 (Versicherungsbote reported).