If insurers do not adapt to the radically changed realities resulting from the Corona crisis and the Ukraine war, they will become irrelevant. This warning came on Thursday from Norbert Rollinger, newly elected President of the General Association of the German Insurance Industry (GDV). “We don’t want to end up like the Catholic Church, which is massively opposed to change from the conservative side,” he said at the GDV Insurance Day. “We at GDV definitely don’t want to become irrelevant.”
The challenge is to develop new ideas and concepts instead of sticking to outdated concepts. For example, it is not possible to artificially keep energy-intensive industries alive when energy prices have risen sharply. “We need new ideas.” Insurers stand ready to accompany the ecological transformation and other changes, he said.
According to Rollinger, Germany’s previous business model no longer works well. Now the country must tap into new sources of prosperity. The insurers see their chance there, said Rollinger, who is the CEO of the R+V Group in his main job. “We have many areas where we can contribute good things.” The insurance industry sees itself as an ideal partner for the transformation of the economy towards more sustainability. She manages investments worth billions, which she must invest profitably and safely.
If companies can do good at the same time, they are happy to take it with them. Because when it comes to the public image, the industry is not at its best. This is also due to the fact that many insurance customers have had disappointing experiences during the pandemic, for example when insurers did not pay for company closures even though the entrepreneurs had taken out insurance. The topic of sustainability offers insurers a good opportunity to put themselves in a positive light.
Rollinger announced that he would make the association faster. It is important to advertise one’s own strengths more clearly, for example in private old-age provision, and not to shy away from challenges such as cyber insurance, but to approach them in a solution-oriented manner.
Cyber insurance as a risk
On the one hand, the industry considers the protection of cyber risks to be a market of the future, on the other hand it fears the so-called accumulation risk in this area: the danger that a single cyber attack hits a large number of customers at once and leads to a major loss for the insurer. Due to increasing damage in this area, protection for industrial customers has recently become significantly more expensive and scarce. In the meantime, large industrial groups have set up their own insurers. “It would be a shame if we simply gave up such fields,” said Rollinger.
If the GDV had hoped for a promise for a reform of the state-subsidized Riester pension from the visit of the Federal Finance Minister Christian Lindner, he was disappointed. When asked by CEO Jörg Asmussen, Lindner only said that the coalition was also discussing how the Riester and Rürup pensions could become more attractive.
On the other hand, the industry was pleased about Lindner’s statement that the insurance industry is a model branch of the German economy, whose international competitiveness he wants to strengthen. In this context, he promised appropriate regulation that would not overwhelm small companies when it comes to capital requirements.
“Not every insurer is an alliance,” said the FDP minister with regard to the industry leader. For years, the GDV has been insisting on expanding so-called proportionality. Lindner himself also expressed wishes to the address of the insurers. He hopes that they don’t invest their entire capital in government bonds, but also invest it in young companies, he said, referring to the federal government’s future fund for venture capital.
Lindner announced rapid progress with the announced stock pension with a starter package of ten billion euros within the statutory pension insurance. The corresponding legislation is to be initiated in 2022.
Lindner promised the industry additional business in connection with the planned obligation to provide for old age for the self-employed. This obligation is expressly not limited to the statutory pension insurance. The field is also open to attractive offers from the private insurance industry, said the finance minister.