Gesamtverband der Deutschen Versicherungswirtschaft e.V.

2009 Yearbook
The German Insurance Industry
2009 Yearbook
The German Insurance Industry

Gesamtverband der Deutschen Versicherungswirtschaft e.V.

(German Insurance Association)
ISSN-0722-1118

Wilhelmstr. 43/43G Phone +49 30 20 20 51 17

D-10117 Berlin +49 30 20 20 51 18
Fax +49 30 20 20 66 04
P.O.Box 08 02 64
info@gdv.de
D-10002 Berlin
www.gdv.de
Insurance industry in 2009 at a glance About us
f

Insurance industry in 2009 at a glance 2009 2008 The Berlin-based German Insurance Association (GDV) is the umbrella organisation for private
Figures for 2009 estimated insurers in Germany. Its 468 member companies, with 212 000 employees and trainees, offer
comprehensive coverage and retirement provisions to private households, trade, industry and
Premium income1) of GDV members billion EUR 169.6 164.5 public institutions, through 447 million insurance contracts. As a risk taker and major investor
Increase in premium income per cent 3.1 1.0 (with an investment portfolio of about 1 165 billion EUR), the insurance industry has outstanding
Insurance penetration2) per cent 7.07 6.60 significance in connection with investments, growth and employment in our economy.
Premiums of private households billion EUR 150.5 145.4
Premiums paid per inhabitant EUR 1 835 1 770 GDV articulates and represents the positions of the German insurance industry before society,
life assurance/old-age provision EUR 1 017 969 politicians, businesses, the media and academia, working to achieve regulatory conditions
private health insurance EUR 384 369 which will allow insurers to perform their responsibilities in optimal fashion. At the same time,
casualty/property/accident insurance EUR 434 432 the Association is a source of expert information about all matters relating to the insurance
industry, making available its wealth of experience and information to the public. GDV informs
Insurance benefits (GDV members)3) billion EUR 136.9 134.2
and supports its member companies as a service provider, addresses political and social
life assurance4) billion EUR 72.9 72.1
­developments of relevance for the sector and develops solutions.
private health insurance billion EUR 21.4 19.6
motor insurance billion EUR 19.3 19.6
Insurance contracts and risks million about 447 444
Employees subject to social security
contributions in the insurance industry5) 280 000 285 300
thereof in insurance companies 212 000 216 300
Insurance intermediaries 250 2026) *)

Investments7) billion EUR 1 180 1 160

Largest insurance classes based on

gross premiums written (GDV members)
life assurance billion EUR 83.4 79.6
private health insurance billion EUR 31.5 30.3
motor insurance billion EUR 20.1 20.4
general liability insurance billion EUR 6.8 6.8
private accident insurance billion EUR 6.4 6.4
comprehensive insurance on buildings billion EUR 4.7 4.4
legal expenses insurance billion EUR 3.2 3.2
comprehensive insurance on contents billion EUR 2.6 2.6
marine insurance billion EUR 1.4 1.4

1) gross written premiums of GDV members (without foreign business and business from ceding undertakings, but incl. commercial business, with­
out single premiums resulting from bonus and rebate provisions in life and health insurance), account for over 95 per cent of the total market, 2) gross
written premiums of direct insurers as a proportion of gross domestic product, 3) life and private health insurance: disbursed benefits only, 4) incl.
Pensionskassen, 5) with direct insurers and reinsurers and in insurance mediation business, 6) as of August 2009, 7) incl. reinsurers (in each case pre-
ceding year’s figures), without Pensionskassen and funeral expenses funds.
*) not available for 2008.
2 2009 YEARBOOK Contents 2009 YEARBOOK 3

4–5 46–83 84–137 138–141

List of tables and Business trends, results and
graphs environment of private insurance
50 2009 business trend
57 Investments and capital markets
62 The insurance industry as part of
7 the overall economy
65 Level of private provision in
A word in advance Germany
66 Private cover and
social security
67 Capital accumulation of
8–45 private households
70 Insurance and businesses
Viewpoints 70 Competition and consolidation
in the insurance industry
72 The international interdependence
of the insurance industry
73 The insurance industry as job
provider
Insurance classes GDV and its members
and types
86 Life assurance,
Pensionskassen and
pension funds
97 Private health insurance
103 Casualty, property and
accident insurance
103 Motor insurance
115 General liability insurance
116 Private accident insurance
118 Legal expenses insurance
120 Property insurance
125 Marine insurance
127 Credit insurance
129 Nuclear insurance
133 Insolvency insurance
135 Reinsurance
 List of tables and graphs

4 2009 YEARBOOK

Insurance industry overall

Insurance industry in 2009 at a glance
51 Premium income in private insurance
52 Insurance benefits and claims paid

Investments and capital markets

57 Capital market data
57 Current income from investments
58 Investment portfolio by type of investment
59 Investment portfolio by insurance class
60 Alternative investments as part of overall investments

The insurance industry as part of the overall economy

63 Household insurance protection, 2008/2009 n Graphic

Level of private provision in Germany

66 Insurance in the national economy

Private cover and social security

Capital accumulation of private households
68 Formation of monetary wealth of private households by type of investment
69 Monetary wealth of private households by type of investment

Insurance and businesses

Competition and consolidation in the insurance industry
70 Number of insurance companies by class of business
71 Insurance portfolios at year-end

The international interdependence of the insurance industry

The insurance industry as job provider
74 Survey on the development of employment figures
75 The largest insurance centres
77 Age structure
79 In the service of security n Graphic

Life assurance, Pensionskassen and pension funds

86 Premium income in life assurance (without Pensionskassen and pension funds),
savings and savings ratios of private household
87 How people insure their lives n Graphic
89 Life assurance (without Pensionskassen and pension funds):
time series of redeemed new business
90 Breakdown of premium income in life assurance (without Pensionskassen and pension funds)
91 Protection of the public through life assurance n Graphic
92 Benefits paid by life assurers (without Pensionskassen and pension funds)
93 Overview of results in life assurance, Pensionskassen and pension funds
93 Overview of results in life assurance (without Pensionskassen and pension funds)
94 Development of direct insurance and reinsurance
95 Breakdown of benefits paid in life assurance (without Pensionskassen and pension funds)
96 Expense ratio in life assurance (without Pensionskassen and pension funds)

Private health insurance

97 Number of persons with private health insurance
99 Relief in old age n Graphic
 2009 YEARBOOK 5

100 Switching health insurance provider

101 Premium income in private health insurance
101 Breakdown of total expenditure in private health insurance

Casualty, property and accident insurance

103 Claims in casualty, property and accident insurance

Motor insurance
104 Premium income and claims expenditure in motor insurance
105 Loss ratios in motor insurance
105 Road accidents in Germany
106 Motor liability insurance, in figures
106 How long without an accident?
107 Theft of insured motor vehicles by number and claims expenditure
107 Theft of insured motor cars by manufacturer
108 Full comprehensive cover, in figures
108 Semi-comprehensive cover, in figures
109 Average costs of car accidents n Graphic
110 Development of the number of vehicles on the road
111 Theft of insured motor cars by Federal State

Liability, accident and legal expenses insurance

115 Premium income and claims expenditure in general liability insurance
117 Premium income, claims expenditure and loss ratios in private accident insurance
119 Premium income, claims expenditure, number of contracts and claims in legal
expenses insurance

Property insurance
120 Claims per risk in comprehensive insurance on contents and buildings
121 Premium income in property insurance
122 Claims expenditure and loss ratios in the property insurance classes
123 Range of loss ratios n Graphic
124 Large-size claims in industrial property insurance

Marine insurance
126 Marine insurance, in figures

Credit insurance
127 Premium income in credit insurance and number of insolvencies

Nuclear insurance
130 Nuclear insurance, in figures

Insolvency insurance
133 Basic data on the Pension Assurance Association

Reinsurance
135 The largest reinsurance classes
137 Claims and operating expenses in reinsurance

GDV and its members

142 GDV committees and organisational chart n Graphic
A word in advance
The year 2009 was dominated by the worst financial crisis
since the Great Depression, as massive intervention was
necessary by central banks and national governments in
order to avert a complete collapse of the financial system.
In the wake of the financial crisis, 2009 saw the steepest
slump in global economic activity since the end of the
­Second World War, and the prospects for an economic
­recovery next year in Germany and other countries are
still shrouded in uncertainty.
The German insurance industry has proved to be a stabi­
lising factor in this extraordinarily challenging and historic
environment. While insurers were unable to entirely escape
developments in the global financial markets, they were
less affected by the financial crisis than other financial
services providers, an accomplishment which is largely at­
tributable to its business model and to German regulatory
law.
The core business of insurers is the assumption and equali­
sation of risks. In that capacity, insurance companies are
capital accumulation vehicles, i.e. they routinely earn pre­
mium revenues, so that they do not have refinancing prob­
lems. Insurers are long-term investors, and tend to hold
their investments to maturity. Safety buffers are built up
when the capital markets are strong and used up when
the markets are weak in order to equalise capital market
fluctuations over time. The insurance business model dif­
fers significantly from that of banks in this respect.
2009 YEARBOOK 7
The financial crisis has shown that Germany’s regulatory
laws and regulatory system for insurance work very well.
That’s why German insurers have emphatically opposed
integrating insurance regulators into a new regulatory
system for the banking sector, in line with the surprising
proposal made by Deutsche Bundesbank in October 2009.
It is important and proper that the coalition members
chose not to follow this proposal.
Insurance supervisory law, which features strict statutory
rules for investments, guarantees one thing above all for
our customers: reliability. The core elements of life assur­
ance investments – minimum returns on actuarial reserves,
diversification and spreading of investments, risk equali­
sation over time – have proved themselves a million times
over. Conventional life assurance has often been assailed
in recent years as boring or “unsexy,” but for the second
time in this young millennium, it has proved to be one of
the safest alternatives for personal retirement planning.
The ability to make the right decisions as part of an indi­
vidually optimised retirement strategy depends on access
to high-quality professional advice. The amendment of
insurance mediation law creates a legal framework which
has been hailed by experts as a model for other areas, and
which may serve as the basis for regulation in the financial
services sector. The insurance industry will actively support
any sensible improvements in consumer protection.
Rolf-Peter Hoenen Dr. Frank von Fürstenwerth
President Chairman of the Executive Board
XX 2009
Jahrbuch
YEARBOOK
2009 STANDPUNKTE Jahrbuch 20098 XX
|9

The global economic slump created by the current financial and economic crisis has been
the worst since the Great Depression. Starting in the banking system, the crisis spread to
the financial markets and the US economy, and then proceeded to hit global markets for
goods and services with massive force: global trade eroded and investors scaled back their
expectations, triggering a slump in global investments. In response to the dramatic turn of
events in the banking sector and in the economy as a whole, governments all over the world
adopted stimulus packages of unprecedented size. Today, the global economy is showing
Viewpoints signs of recovery.
10 2009 YEARBOOK VIEWPOINTS
As an export-based economy, Germany was
hard hit by the impact of the banking and
­economic crisis. German banks had, and con­
tinue to have, a large number of problematic
securities on their books, and our economy
was heavily affected by the slump in global
trade. The German government’s aid package
has succeeded in mitigating the impact of the
global downturn and preventing the imminent
collapse of several banks. But despite the
­absence of any more setbacks in the banking
sector, the future of the German economy
continues to be highly uncertain, although it
seems that the economy has recently begun
to bottom out.
In this context, the German insurance industry
acquitted itself very well: at no point did any
insured person have to worry about their
­re­tirement provisions. In fact, insurance com-
panies proved to be a stabilising factor in the
financial crisis, a positive judgment which has
been repeatedly reaffirmed by the Federal
­Supervisory Office for Financial Services (BaFin).
The financial market But of course, insurance companies
crisis had an indirect cannot remain entirely immune from
impact on the developments in the international
insurance sector ­financial markets. Write-downs per-
formed by insurance companies in
2008 came to about 10 billion EUR, or about
1 per cent of their total investments. These
write-downs resulted primarily from losses in
the equities markets and from structured
s­ ecurities. Given that default and liquidity
risks remain high, insurance companies may
have to perform additional write-downs this
year as well, as the environment continues to
be volatile.
The German insurance industry helped The insurance
in the rescue of Hypo Real Estate (HRE) industry’s contribu­
by assuming 1.4 billion EUR in guaran- tion to the rescue
tees and taking part in HRE’s refinanc­ of systemically
ing. With a share capital increase important banks
­adopted on 2 June 2009, the German
government increased its stake in HRE to
more than 90 per cent, laying the groundwork
for a squeeze-out, which was approved by an
extraordinary general meeting on 5 October
2009. While the HRE investigative committee
has been unable to demonstrate that the
­German government or regulators were re­
sponsible for policy errors or that they failed
to take appropriate action, the hearings have
made it clear over and over again that BaFin’s
authority to intervene in order to combat a
crisis such as the one which struck HRE did
not go far enough.
Accordingly, the German government has de-
cided to develop a procedure for restructuring
systemically important banks, a procedure
which would precede a bankruptcy process
and protect shareholders. This statute should
cover about 10 per cent of German banks.
­Insurance companies would not be directly
­affected by such a law, but the statute may

provide that all creditors will have to partic­i­
pate in the reorganisation process under cer-
tain conditions, e.g. by converting debt into
equity (debt equity swaps) or agreeing to
­defer payment of the bank’s debts. In any
­effort to create special insolvency rules for
banks, careful attention must be paid to
­protecting legitimate creditor rights.
Reform proposals The financial market crisis has brought
with a sense forth a whole series of reform pro­
of proportion posals having to do with topics such
as capital adequacy requirements, risk
management, regulation, transparency and
product regulation. The tendency continues
to be towards proposals to regulate not only
banks, but all financial services providers,
­despite the fact that banks are fundamentally
different from insurance companies. As capi-
tal accumulation vehicles, insurance compa-
nies are subject to different risks than banks,
which refinance often on the capital market
on a short-term basis. While the insurance
business model system­atically generates cash
flow, banks can quickly get into trouble due to
cash shortages. The disappearance of the
­inter-bank market following the collapse of
Lehman Brothers emphatically demonstrated
this point. Therefore, German insurers reject
the wholesale application of banking sector
rules to insurance companies. The fact is that
the rules in effect for the insurance sector
have proven effective. Any new regulatory
measures must adhere to the principle of
­sustainable regulation, regulation which iden-
tifies the causes of potential problems in the
­financial markets and assesses the conse­
quences of regulatory action.
2009 YEARBOOK 11
The German insurance industry Protecting BaFin’s
­supports preserving the independ­ independence
ence of the insurance regulatory
­mechanism and rejects any measure to take
responsibility for regulating the insurance
sector away from BaFin and place it under
the control of Deutsche Bundesbank or to
­separate solvency requirements from market
regulation, as proposed by Deutsche Bundes-
bank in October 2009. Deutsche Bundesbank
has no experience in the field of insurance
­regulation. Insurance companies have a fun-
damentally different business model than
banks, so that insurance regulators cannot
follow the same rules as banking regulators.
The German insurance regulation The German
­system proved effective during the regulatory system
­financial market crisis, so that this for insurance works
crisis must not be used an opportu-
nity to merge insurance and banking regu­
lators into a single regulatory agency under
the umbrella of a central bank. Effective and
efficient structures must not be changed
­without cause. Unlike the banking sector, the
insurance regulatory system does not have
any redundant structures. On the contrary,
splitting the system in two would create the
very condition which is exactly to be overcome
in the banking sector.
The effectiveness of Germany’s insurance
­regulation must not be jeopardised by hasty
restructuring measures. With the formulation
and implementation of Solvency II, and in
view of the tough financial market environ-
ment, insurance regulators face great chal­
12 2009 YEARBOOK VIEWPOINTS
lenges right now, and we cannot afford major
changes involving the introduction of un­
proven structures and the loss of key person-
nel. The ability of the regulatory system to
flawlessly function and take action based on
clearly defined goals, high-quality expertise
and adequate market proximity is of decisive
importance.
The effectiveness of regulatory efforts in each
sector depends on how well the sector in
question is represented in the regulatory
agency’s work program and staff, particularly
at the highest levels. Regulators should be
­experienced, have expertise in their respective
fields and they should be familiar with their
sector’s business model. Only direct represen-
tation of insurance regulators at the highest
levels can ensure the agency’s ability to make
important and far-reaching decisions with the
requisite speed. Subordinating insurance regu-
lators to Deutsche Bundesbank, on the other
hand, would create an additional hierarchical
level, which would have the effect of slowing
the decision-making process.
Regulators should represent all financial serv­
ices sectors and sub-markets within the inter-
nal market. This cannot be ensured if insurance
regulation is placed under Germany’s central
bank. It is also important for regulators to be
able to successfully represent German inter­
ests before European and international bodies,
which in turn requires an appropriate reputa-
tion and expertise. This is a matter of essential
importance for the German insurance industry,
which includes large companies operating
worldwide.
Deutsche Bundesbank has proposed a Separating solvency
separation of solvency rules and market from market
regulation (the so-called “twin peaks” regulation is not
model), in which case BaFin would the better approach
only be responsible for the latter func-
tion. In practice, a clear separation of solvency
and market regulation would not be expedi-
ent for insurance companies, as such a system
would ultimately result in redundant regula­
tion and supervision.
The twin peaks model has not proved to be
the better approach in global practice. The EU
has examined this model as a policy option for
its future regulatory architecture, but decided
to discard it. So far, the only EU Member State
to adopt such a regime has been the Nether-
lands, whose market is heavily dominated by
financial conglomerates. Regulatory structures
should be appropriate for their respective
markets.
Making a single agency responsible Conflicts of interest in
for monetary stability and for banking monetary policy and
and insurance regulation creates new financial stability
conflicts of interest, and therefore
new risks for the financial market. This is
­particularly true in cases where the interests
of both debtors (banks) and creditors (insur­
ance companies) have to be considered.
Insurance companies do not create systemic
risks like the banking sector does. No recog-
nizable systemic risks are created due to rela-
tionships between insurers. Rather, systemi­
cally important risks in the insurance sector
could arise from pandemics, natural disasters
or terrorism, i.e. in a totally different manner
than in the banking sector. Accordingly, the
stability of the financial system requires a spe-
cific regulatory mechanism for the insurance
market.

Mixing goals and functions creates the risk of
blurring responsibilities, resulting in legal
uncertainty. It is an open question how in­
dependence in preserving the stability of the
currency can be constitutionally reconciled in
practice with the need to follow parliamen­
tary directives in regulatory questions and
matters relating to the stability of the financial
markets, areas which are subject to parlia-
mentary control.
“ESRB” too In September 2009, the European
bank-heavy Commission presented its proposals
for the formation of a systemic risk
­regulator, the European Systemic Risk Board
(ESRB), and for the creation of three EU regula-
tory agencies with responsibility for the insur­
ance sector, the banking sector and the secu­
rities markets. This regulatory reform, to take
effect in January 2011, aims to strengthen
­financial market stability and improve cross-
border regulation in Europe. In general, these
proposals are a step in the right direction.
The creation of a system risk regulator is espe-
cially important. The ESRB will be charged
with identifying financial market risks across
national and sector boundaries and serving as
an early warning system. Adequate participa-
tion by the insurance industry in the various
ESRB bodies is of vital importance. Otherwise,
efforts to improve the stability of the financial
markets will be incomplete. Accordingly, insur­
ance companies should be adequately repre-
sented in the formation of the ESRB. At the
moment, there is only one representative of
the European Insurance and Occupational
Pensions Authority (EIOPA) against about 30
central bankers: that is a disproportionate
2009 YEARBOOK 13
r­ elationship, creating the risk that the Board’s
specifications and recommendations will be
in the interests of the central banks, and
would be inappropriate when applied to
insur­ance companies.
EIOPA will take over the functions EIOPA to take over
currently performed by the Commit- the functions of
tee of European Insurance and Occu- CEIOPS
pational Pension Supervisors (CEIOPS),
as well as assuming additional responsibili-
ties. In particular, EIOPA will be responsible for
ensuring consistent application of Community
law in the European Union insofar as laws are
applied differently in different Member States.
If a national regulatory agency fails to comply
with a binding standard defined by EIOPA,
that agency will be called upon to comply by
EIOPA or the European Commission and, if it
fails to do so, EIOPA has the authority to
­contact national companies directly and order
compliance with the standards. However,
­binding directives should be issued only to the
national regulators, not to the companies
­directly, in order to avoid blurring responsibil­
ities, so that the Member States will still be
r­ esponsible for regulation within their bounda­
ries.
14 2009 YEARBOOK VIEWPOINTS
Strengthen principle- German insurers support adhering
based regulation to and expanding a principle-based
regulatory system. Such a system
provides the advantage of flexibility and
­allows regulators to consider the individual
­situation of each company and identify sys­
temically important risks. This in turn enables
timely action in the event of problems, as
­regulators would not be required to wait until
quantitative criteria are met. Moreover, quan-
titative methods may elicit countermeasures
on the part of companies, including regula­
tory arbitrage. Finally, quantitative regulatory
methods are not suitable for reliably predict­
ing future developments.
Management board In August 2009, the Act on the
compensation: ­Adequacy of Management Board
no excessive Compensation took effect. At the
compensation in the centre of the new statute are rules
insurance industry for defining reasonable compensa­
tion, with due regard for the
­man­agement board’s performance and the
company’s position, which reward manage-
ment board members based on their long-
term decisions. The statute also makes it
­easier for the supervisory board to reduce
­salaries.
The German insurance industry supports the
objectives of this law, but would like to point
out, with a view towards future discussions in
this area as well, that compensation in the
­insurance industry is not and has never been
excessive. For example, the Federal Supervisory
Office for Insurance (now BaFin) ruled in 1978
that the compensation of management and
supervisory board members in the insurance
industry may not be tied to premium revenues
or new business. Rather, the goal of manage-
ment must be to “build a solid portfolio.”
­ ogether with the risk management rules
T
­specified before the crisis (MaRisk VA), this
principle forms the basis for a sustainable
compensation system in the German insur­
ance industry.
With respect to the bonus debate, we must be
careful not to overshoot our target. To this
end, the rule under which permanent cuts in
management pensions can be ordered up to
three years after departure from the company
must remain a measure of last resort.
In cases where a company sustains losses as a
result of actions by corporate officers, direc-
tors and officers liability insurance (D&O
insur­ance) now includes a minimum deduct­
ible of 10 per cent for each individual loss.
The coverage limit for all losses in each year
must be at least as high as one and a half
times the officer’s fixed annual salary. This
statutory rule for a mandatory deductible
­represents a substantial infringement of the
freedom to contract. Accordingly, the insur­
ance industry has spoken out against adop­
tion of this rule during the legislative process
and has contended, in case of adoption, that
this rule should at least be restricted to of-
ficers of publicly traded joint-stock compa-
nies. Unfortunately, lawmakers chose not to
heed this call, enacting a rule which applies to
all German joint-stock companies. However,
lawmakers were right not to preclude compa-
nies from obtaining private insurance for their
deductibles. Demand for private insurance to
cover the cost of these deductibles is expected
to arise, and the insurance industry will meet
this demand in a manner appropriate for its
customers.

In the course of EU-wide implementation of
Solvency II, CEIOPS has proposed applying
the compensation rules developed by the
­Committee of European Banking Supervisors
(CEBS) for the banking sector to insurance
companies. There are various reasons why
such a proposal would go too far. Under this
regime, the compensation system would be in
effect for all employees in a company regard-
less of whether those employees are actually
in a position to incur material risks. Further-
more, the proposal makes statements as to
the amount of variable compensation relative
to fixed salary, and to the criteria for such vari-
able compensation, but the Solvency II Direc-
tive requires only an effective corporate govern­
ance system, and does not provide a basis for
such detailed specifications. An arrangement
such as the general rule stipulated by BaFin in
its January 2009 MaRisk VA regulation, which
states that variable compensation must be
based on the company’s long-term results,
would be sufficient.
Solvency II to come Following extensive discussions with
no later than the EU Council and the Commission,
­November 2012 the European Parliament ­adopted the
Solvency II Framework ­Directive in
May 2009. The German insurance industry
supports the compromise which has been
reached. Solvency II will be implemented into
national law no later than November 2012, at
which point it will become day-to-day reality
for all companies. On the question of the
­supervision of corporate groups, how­ever,
­lawmakers missed an important opportunity
to establish an international regulator for
­insurance groups. This possibility is subject to
2009 YEARBOOK 15
a re-submission clause and will be reconsid­
ered three years after the Directive takes
­effect.
National governments are now bound by
­Solvency II’s very narrow implementation
timetable. Now that the Solvency II Directive
laid the framework (Level 1), it is now the re­
sponsibility of the EU Commission to elaborate
on this framework by enacting implementing
measures (Level 2). These implementing rules
may be enacted in the form of a Regulation,
which would apply directly in all Member
­States, or in the form of a Directive, which
would require implementation into national
law. The Regulation method is the right ap-
proach, as this is the only way to ensure that
consistent rules are enacted throughout the
EU.
The entire European insurance indus- CEIOPS Consultation
try views the CEIOPS Consultation Papers are cause for
Papers on the “second wave” of Level 2 concern
measures under Solvency II with
great concern. It has become apparent that
the guiding rules which were defined in the
Directive in the form of principles were not
observed in each case and have generally
been interpreted too narrowly. We now call
upon the EU Commission to carefully consider
the statements made by the European insur­
ance industry when formulating implement­
ing measures.
16 2009 YEARBOOK VIEWPOINTS
The lessons of the financial crisis must be
­incorporated into Solvency II, and special
­attention must be devoted to the pro-cyclical
effects created by the Solvency II regime, such
as the selection of an adequate yield curve. It
is unacceptable for the CEIOPS working
groups involved in formulating the implement­
ing measures to introduce stricter rules in
the individual areas of their work independ­
ently and without consultation. Given their
narrow interpretation of the Directive, the net
effect of the CEIOPS proposals has been to
propose rules which are substantially stricter
than the regulatory framework called for in
the Directive. This is reflected in the proposed
restrictions on the recognition of capital and
the considerable increase in risk factors in
­several cases.
In light of the fact that the rules which are
­adopted will set the course for the future, the
German insurance industry deems it neces­
sary for all involved to critically examine what
capital levels should be sought as the target
amount, to which end full recognition of
­capital and risk buffers is indispensable in
­accordance with their respective economic
functions. The German insurance industry
also considers it essential for the regulatory
instrument for capital add-ons to create legal
certainty, clarity and a high degree of EU-wide
harmonization.
Fundamental revision is needed with Continuing
respect to the proposed reporting on the path of
­requirements. German insurers prefer Solvency II
to avoid a situation in which the
­mandatory reports to regulators and to the
public attain the scope of a separate and addi-
tional annual report, or in which information
of relevance for competition has to be pub­
lished. Rather, the new requirements should
be consistent with established reporting pro­
cesses and accounting deadlines.
It is also necessary for capital adequacy require­
ments to consider the effect of dispropor­
tionate reinsurance coverage. The “health in-
surance” and “accident insurance” segments
should be kept distinct, as specified in the
Framework Directive, and should not be treated
as a single segment, as proposed by CEIOPS.
The quantitative impact study currently being
performed by the German Insurance Associa-
tion (GDV) independently, i.e. without the
­assistance of CEIOPS or BaFin (QIS4b), which
represents a repetition of QIS4 based on 2008
data, will produce additional quantitative
data, data which should be considered as the
process of formulating Solvency II continues.
This additional data will create a continuous
data set from the beginning of QIS1 until QIS5
(2010) and show possible effects of the finan-
cial market crisis. GDV will work ­actively to
i­ntroduce the results of QIS4b into the discus-
sion process for the formulation of Solvency II.

The German insurance industry supports
c­ ontinuing on the current path and favours
implementation of Solvency II in accordance
with the guiding principles defined in the
Framework Directive.
Revision of The International Accounting Stand­
IAS 39 must be ards Board (IASB) has proposed a
based on the ­revision of International Accounting
business model Stand­ard (IAS) 39. This standard is of
fundamental importance for the Ger-
man insurance industry, as one of the largest
institutional investors in the international
­capital markets, since it regulates the classifi-
cation and measurement of investments. Of
course, the preparation of individual financial
statements by German insurers, as well as
profit shares for life insurance customers and
taxation, is still based on the accounting rules
of the German Commercial Code. But the pre-
paration of consolidated financial statements
in accordance with the IASB’s standards is no
longer limited to capital market-oriented in-
surance groups and changes to these stand­
ards also affect the discussion with respect to
national and EU accounting rules, as well as
regulatory law.
The IASB’s proposals centre upon the idea of
reducing the number of measurement cat­
egories for financial instruments from four to
just two, so that in the future, financial instru-
ments would have to be recognized either at
fair value or at amortised cost, and the classi-
fication of financial instruments would be
made based on their characteristics. While in-
surers welcome such plans to simplify ac-
counting rules, the proposed revisions do not
represent a sustainable accounting method
for financial instruments for business models
with long-term time horizons. The proposed
2009 YEARBOOK 17
changes do not fit the insurance business
­model. In fact, they take accounting rules
which were identified by the accounting pro-
fession and the G20 states as “accelerants” in
the financial market crisis, and make them
even worse. German insurers oppose classifi-
cation of financial instruments based on their
characteristics. Instead, classification should
be based on whether the company in ques­
tion is willing and able to hold the financial
­instruments for the long term.
Moreover, proper delineation between real­
ised and unrealised investment results is an
integral component of the insurance business
model, particularly for life assurers, in view of
policyholder profit shares. If the proposals are
implemented in their present form, earnings
data would become less transparent. While
even short-term and fleeting stock market
fluctuations would have to be reported as earn­
ings in the case of stock exposures, dividends
from strategic investments would only show
up in shareholders’ equity. This model is far
less transparent than the current system for
both policyholders and investors. Moreover,
exposures to stocks or structured corporate
bonds, which make financial sense at the
­moment given the growth in capital require-
ments, would have to be reconsidered in light
18 2009 YEARBOOK VIEWPOINTS

of the risk. It is therefore important for insur­ These allegations are entirely baseless, as
ers to retain the option of disclosing unreal­ §341b of the Commercial Code merely provides
ised fluctuations in the value of equity instru- for a financially sensible depiction of economic
ments, particularly stocks, in shareholders’ reality. After all, the goal of accounting rules
equity alone, while realised results, such as must be to accurately reflect the business
­dividends from strategic investments, would ­model of the reporting company, and the in-
continue to be reported as earnings. surance business model is based on long-term
investments. The insurance industry was the
The insurance industry needs accounting only sector which was required to recognise
­rules which are appropriate for a long-term securities as current assets in each case until
business model. Accordingly, the IASB should §341b of the Commercial Code was amended
be focused on developing a sustainable in 2002, so that now the accounting rules for
­accounting method for financial instruments, securities applicable to insurers are consistent
instead of keeping up with a politically moti- with those in effect for banks (§340e of the
vated timetable. It would be ironic if the new Commercial Code) and with general account­
rules which were enacted in an effort to ing rules for all sectors.
­discourage short-sighted thinking by banks
had the effect of penalizing insurers, who are As amended, this accounting rule is appropri-
distinguished by their long-term and risk-­ ate for the long-term investment policy prac­
conscious business model. ticed by insurance companies. After all, insur­
ers tend to have a long-term investment
Application of § 341 b In the context of the financial market structure, in line with their long-term liabil­
of the German crisis, reservations have occasionally ities, and short-term capital market fluctua-
Commercial Code: been expressed in recent months tions have no significance for them. Meas­
no special rule with respect to the accounting uring securities based on the rules for fixed
for insurers ­method for securities in accordance ­assets means that insurance companies will
with §341b of the German Commer- not have to sell equities and investment shares
cial Code, as this clause has been presented when the capital markets are weak as an
as a special rule allowing insurers to defer ­accounting precaution. On the contrary, these
“hidden” liabilities in their investments, there- rules allow insurers to act counter-cyclically as
by concealing their true earnings and liquidity part of their long-term investment policy, a
position. practice which has the effect of stabilising the
equities markets.

German insurers Based on a feasibility study presented
support insurance in early 2008 and subsequent consul-
guarantee schemes tations, the EU Commission will lay
for life and out its plans in the area of insurance
health insurance guarantee schemes in a White Paper
at the end of 2009/beginning of 2010.
The German insurance industry supports the
introduction of insurance guarantee schemes
in life and private health insurance due to the
need for long-term social security in those
areas. Accordingly, GDV created two guarantee
schemes on its own initiative: “Protektor” for
life assurance and “Medikator” for private
health insurance. Both of these institutions
served as a model for the creation of statutory
insurance guarantee schemes in the 2004
­Insurance Supervision Act.
In casualty, property and accident insurance,
on the other hand, the situation is not at all
comparable to the situation in life assurance,
both with respect to the importance of
­coverage from the point of view of social secu-
rity and with respect to the vulnerability of
policyholders if the insurer becomes insolvent
(absence of the savings component). Regard-
less of the areas for which the EU Commission
plans to address this issue, the claimants in
any future system should be limited to
consum­ers, given the fact that the introduc-
tion of these schemes should be essentially a
consum­er protection measure. The schemes
should have deductibles and maximum in-
demnities, and premiums paid in advance
should not be guaranteed in case of insolvency
in order to motivate policyholders to select
­financially sound insurers. In addition, the EU
should ­limit itself to minimal harmonisation
2009 YEARBOOK 19
in order to ensure optimal integration of these
schemes into the national statutory environ-
ment and to allow the existing insurance guar­
antee schemes which have proven themselves
in the past to continue to function unchanged
if possible.
The German insurance industry rejects the
proposals for mutually supporting national
guarantee schemes, as well as the creation of
a (pan-) European guarantee scheme. These
proposals are inconsistent with regulation
­according to the country of origin principle, a
principle which will govern EU regulatory law
in the future as well, and they would institu­
tionalise the systemic risk that problems will
spread from one independent market to an­
other. Such a system would also run a consid­
erable risk of creating false incentives for
­national regulators.
In recent years, various measures Eliminate the
have been introduced making corpo- corporate tax rules
rate tax rules stricter, partly in order which exacerbated
to finance the 2008 corporate tax the crisis
­reform: §8c of the Corporation Tax
Act restricts the deduction of losses, stating
that a company’s losses are not deductible if
more than 50 per cent of its shares are trans-
ferred within five years and only partially
­deductible if more than 25 per cent of its
­shares are transferred. A company’s income is
subject to so-called “minimum taxation” rules,
under which at least 40 per cent of current
­income is taxable, regardless of losses from
20 2009 YEARBOOK VIEWPOINTS
prior years. In addition, there is the ­so-called
“interest barrier,” which limits the interest
e­xpenses a company can deduct. ­Interest and
other financing expenses now count for the
purposes of trade tax.
All of these rules may be detrimental in the
current financial and economic crisis if com-
panies get into a crisis situation or face steep
losses. The restrictions on loss deductions
pose a massive hindrance to the necessary
­internal restructuring and reorganisation
­processes and the minimum taxation rules
delay the company’s recovery. Even insurance
companies themselves are affected by these
rules.
GDV, working together with other leading
­associations of the German economy, has
­repeatedly and emphatically called upon law-
making bodies to remedy this situation in the
time since the outbreak of the crisis in autumn
of last year. Even during the legislative process,
GDV warned of the negative consequences of
these rules. The relief which lawmakers have
granted as part of the Citizen Relief Act is not
enough, since it relates only to the interest
barrier and loss carry-forwards in restructur­
ing cases, and since it only applies for a limit­
ed time. Upon enacting legislation to stabilise
the financial markets a year ago, the federal
and state governments acknowledged that
these rules had the effect of exacerbating the
crisis and had them repealed, but only for the
purposes of the bank rescue.
The insurance industry is therefore in favour
of adding a group clause to the loss deduction
restriction, so that advisable restructuring
processes taking place within a single corpo­
rate group will no longer have to be cancelled
for tax reasons. Action is also needed in this
regard in view of the current state of public
­finances. If businesses are unable to position
themselves in operationally optimal fashion
for tax reasons, the competitiveness of
Germany’s businesses will decline and govern-
ment tax revenues will decline as well over
the medium term.
Credit insurers became the focus of Credit insurance:
public interest in the course of the high capacity even in
­financial and economic crisis due to times of crisis
frequent media reports about com­
plaints from businesses that trade credit
insur­ers were withdrawing in large numbers
from certain sectors, such as the automotive,
textile and steel industries.
In discussions with the German government
about the situation in the credit insurance
market and the calls made in some parts of
the economy for a government supplement to
private credit insurance in Germany, GDV has
demonstrated that German credit insurers
continue to have high capacity available in all
sectors of the economy. At the end of August
2009, for example, the number of contracts
was still higher than at the end of 2007, i.e.

before the outbreak of the financial crisis, and
insured amounts were only slightly below
that level. The decline in insured amounts
which has been observed since the end of
2008 is primarily attributable to the decline in
orders on hand reported by many companies,
which in some cases assumed massive pro-
portions, since insured amounts are directly
related to trade volume.
Inevitably, however, credit insurers have been
unable to continue to fully subscribe certain
limits as a result of the economic crisis and
the worsening credit ratings of buyers, which
exacerbated the credit squeeze. Credit insur­
ers were required to do so in the interests of
their policyholders, with whom they form a
community of risks, as is evident from the fact
that deductibles average 20 to 25 per cent.
Once the German government decided in
mid-2009 to provide supplementary govern-
ment protection to businesses supplying
goods to companies with inadequate credit
ratings, GDV’s credit insurers consulted with
the German government with respect to
­possible solutions. The credit insurers offered
to make their expertise and infrastructure
available for this purpose, proposing to the
government a combination of a so-called
“top-up” model, in which the state would
­assume the default risk no longer covered by
credit insurers by increasing the limit, and a
“ground-up” model, in which the state assumes
the entire default risk to a certain extent and
credit insurers cover the rest.
2009 YEARBOOK 21
The German government’s Business Financing
Steering Committee decided in September
2009 to initiate top-up coverage. The pro-
gramme is to be launched this year and will
expire at the end of 2010. This programme,
with a total ­coverage framework of 7.5 billion
euros, is most certainly not a government
subsidy for credit insurers, who are experi­
encing no ­solvency or liquidity problems, but
is instead meant to help the businesses which
purchase credit insurance, as well as their
­customers. GDV’s credit insurers welcome and
support the introduction of top-up coverage,
although a combination of top-up and
ground-up c­overage would have helped their
customers even more.
In addition to adopting a stricter Policymakers focus on
­regulatory regime, policymakers consumer protection
­focused on strengthening consumer
protection in the wake of the financial crisis,
posing new requirements to ensure adequate
consumer protection in the field of financial
services so that consumers will not be help-
less when confronted with complex products
in globalised markets. The insurance industry
is much better-positioned in this regard than
the rest of the financial services sector, since
the reform of the Insurance Contract Act and
the intermediary regulation have already
­introduced new rules raising the level of
­consumer protection.
22 2009 YEARBOOK VIEWPOINTS
Accordingly, the consumer protection resolu-
tion adopted by the German Parliament on
3 July 2009 is targeted primarily at other
­financial services providers. This resolution
precludes investment advisors from giving
commission-driven advice, stating that the
needs of the customer must be the primary
consideration in recommending investment
products. Moreover, commissions and costs
are capped, at least for state-subsidised pro-
ducts. In addition, financial services providers
are required to fully disclose all costs, in­
cluding “early termination” costs for long-
term investments, and exaggerating profit
opportunities is prohibited. Other subjects of
the political discussion include the develop-
ment of certification systems for financial
products, ideas to strengthen consumer pro-
tection groups and proposals to transfer mar-
ket surveillance functions to those groups.
Clear improvement The rules in effect for the insurance
in consumer industry are often cited as a model of
­protection for consumer protection in the financial
insurance customers markets. For example, the German
Ministry of Food, Agriculture and
Consumer Protection has proposed a product
information sheet for investments which
­corresponds to the one already used in the
­insurance industry. The reform of insurance
contract law and the new (EU) insurance
­intermediary legislation have produced a clear
improvement in consumer protection for in-
surance customers.
These rules involve the documentation of
­ dvice, expanded disclosure requirements
a
and intermediary qualifications. The new In-
surance Contract Act states that customers
must have all information about the contract
before they make their decision. The Act also
introduces the product information sheet,
which gives customers an overview of the
­major aspects of the contract and allows
them to compare it with other products based
on a standardised description. Life and health
insurance contracts now also indicate the
costs which are factored in, so that customers
can consider the costs in their contract when
making their decision.
The reform of insurance intermediary New insurance
law has created a legal framework intermediary law
which should serve as a model for should serve as a
other areas. Insurance mediation is a model
trade which requires a licence, so that
intermediaries must be reliable, have their
­finances in order and provide proof of profes-
sional liability insurance coverage, in addition
to passing a proficiency exam and/or pos­
sessing adequate qualifications. In addition,
­insurance intermediaries are entered into a
centralized register.
The industry has also created the position of
insurance ombudsman, a much-praised and
non-bureaucratic instrument for resolving
disputes at no cost to the consumer. In­sur­ance
companies are bound by the ombudsman’s
decision for values in dispute of up to 5 000 EUR.

The insurance industry has also gone far
­ eyond statutory requirements to help its
b Rights Directive is meant to create no full harmonisation
customers in the fields of consumer educa-
tion and prevention. The insurance industry
promotes consumer education in financial
questions starting in the schools. GDV’s
­information centre, “Clip and Clear Future,”
educates consumers about insurance issues
of relevance to them by providing objective
and unbiased information.
German insurers The rules and initiatives mentioned
reject a financial above will secure a lastingly high level
certification agency of consumer protection in the insur­
ance industry, with the regulatory
­ uthorities, consumer protection organiza-
a terms and conditions of business (GTC law),
tions, the “Warentest” product testing foun­
dation and the insurance ombudsman already
on the case. There is no need to create new
­institutions, like a “financial watchdog” or a
­financial certification agency. The authority of
the new institutions would overlap with that
of established institutions, creating more
­bureaucracy. Labelling products with “traffic
light colours” would not be advisable for
insur­ance and financial services products,
since the differences between products cannot
be understood just by looking at the colour.
Unlike food products, the suitability of insur­
ance products depends on the customer’s in-
dividual desire for security and risk readiness,
particularly in light of his or her individual life
situation and planning.
The insurance industry believes that financial
services regulation should be based on the
existing regulatory framework for insurance,
and insurers will actively support any sensible
further development of the statutory rules.
2009 YEARBOOK 23
The proposal for an EU Consumer Consumer rights:
consistent EU-wide consumer protec- at any price
tion rules through full harmonisa­
tion. To this end, the Directive lists contractual
clauses which are seen as necessarily or
presum­ably abusive, as well as proposing
­rules for concluding contracts and warranty
rights.
The German insurance industry generally
­supports the effort to consolidate all of the
existing Directives into a single Directive.
However, actual full harmonisation cannot be
achieved with respect to the law of general
since the interpretation of contract law, which
is often of decisive importance in GTC law, is
given over to national lawmakers. Therefore,
the harmonization of GTC and general con-
tract law must be coordinated in order to pre-
vent contradictory interpretations and create
a clear and forward-looking legal basis for
businesses and consumers alike. There are
also concerns with respect to the clauses
­listed in the proposed Directive, especially
­insofar as those lists contain mandatory
24 2009 YEARBOOK VIEWPOINTS
i­ nterpretations of individual clauses. Insurers
reject any proposal to update these lists in the
comitology procedure, in which the European
Parliament and Council would transfer
­responsibility for technical execution to a
committee.
No US-style class The European Commission is working
action suits on proposals to introduce collective
instruments of legal redress for anti-
trust and consumer actions and, at the end of
2008, it presented a Green Paper on Consumer
Collective Redress. It appears that any further
action will have to wait until the new Com-
mission takes office.
The insurance industry opposes the introduc-
tion of new instruments of collective redress
at the EU level and questions the need for
such instruments, given the fact that many
Member States have only recently expanded
the rights of action of consumers and consum­
er associations.
Particularly in the case of collective anti-trust
actions, there is a danger of undermining
­national procedural and damage compensation
law. The industry rejects adoption of the con-
ditions which exist in the US, where victims
often do not even know that an action has
been filed in their name, since they are required
to deliberately opt out of the suit. Such an
­instrument would be inconsistent with Euro-
pean law and tradition.
Moreover, there is no legal basis for collective
consumer actions. The test case proposal is
particularly objectionable, since there is no
way to investigate the specific circumstances
of each sector in the course of the factual and
legal arguments during the trial.
The EU Commission is currently working Use the “PRIP
intensively on inter-sector legislative Initiative” to close
measures in connection with disclosure regulatory loopholes
requirements and marketing for so-called
“packaged retail investment products (PRIPs),”
including investment funds, certificates and
unit-linked life assurance products. However,
the new statutory framework is to be modelled
entirely on the rules for funds.
Given the differences between long-term
­ roducts like unit-linked life assurance and
p
­financial products which are used primarily
for short- and medium-term speculation, like
investment funds, an identical legal frame-
work for product information and marketing
would not be appropriate. A possible solution
would be a set of overarching principles,
which would be supplemented by suitable
implementation measures for each specific
sector. Capital requirements are at least as
­important as disclosure and marketing rules
for consumers of guaranteed capital products,
which are offered by funds as well. While life
assurance companies are subject to strict EU
capital adequacy requirements, similar rules
do not exist for funds. It would be regrettable
if the PRIP initiative did not result in closing
the existing regulatory loopholes with respect
to capital adequacy requirements for these
“guaranteed products.”

EU anti-­ The EU Commission’s proposal for a
discrimination law new Non-Discrimination Directive
should be practicable ­includes a special rule relating to the
provision of financial services, under
which discrimination based on age and dis­
ability is allowed, but only when this discrim­i­
nation is based on statistical data. Discrimi­
nation based on medical records and actuarial
principles, on the other hand, which is allowed
under Germany’s General Equal Treatment
Act, would no longer be allowed. The Euro-
pean Parliament has already issued an Opinion
recommending an adjustment to this restric-
tion, but this Opinion also proposes requiring
insurers to publish the information used in
their risk assessment “upon demand,” despite
the fact that insurers invest a great deal of
money collecting this information, and that
this information is a major competitive factor.
As the political process continues, steps must
be taken to ensure that insurance companies
can continue to rely on high-quality informa-
tion when making their risk assessments. Re-
stricting risk assessment practices would
make insurance more expensive for everyone
and would reduce the spread of private insur­
ance coverage in a time when social security
systems are cutting benefits.
Requiring the publication of information used
in the risk assessment would be tantamount
to a seizure of insurers’ intellectual property
and would diminish product diversity, as each
insurer’s actuarial methods would be dis­
2009 YEARBOOK 25
closed to its competitors. Moreover, this infor-
mation would be of no benefit to consumers,
especially considering that more than one risk
factor goes into the calculation and develop-
ment of insurance products.
Consumers have been unsettled by Data protection:
various data protection scandals in new code of conduct
the past year, and their confidence in for the handling of
a business is increasingly affected by personal data
how carefully it handles its data. The
insurance industry is aware of this, and has
therefore developed a code of conduct for the
handling of personal data, which will be coor-
dinated with the data protection authorities
and approved by the responsible data protec-
tion commissioner in Berlin. This code of con-
duct particularly emphasizes designing insur­
ance business processes in a manner consist­
ent with data protection standards, as well as
transparency for insurance customers and
data security. It will largely replace the consent
clause which is currently in use, and which
has been criticized by data protection and
consumer advocates. With respect to the
­collection of medical data, e.g. by physicians,
the code will be supplemented by a new
­customer-friendly consent and confidentiality
release clause.
26 2009 YEARBOOK VIEWPOINTS
In addition, data protection law should be
further developed in the interests of efficiently
organized customer service, particularly in
corporate groups. Services are delegated and
centralized within insurance groups in order
to create synergies. For example, service
­companies or the parent company’s service
department may handle incoming and out­
going mail for all companies in the group, in
addition to centralized administration of mas-
ter data for all insured persons and possibly
operation of a call centre. This allows the
group’s insur­ance companies to focus on their
core activ­ities, an arrangement which ulti-
mately benefits customers, who can expect
high-quality and low-cost service. Accordingly,
the insur­ance industry calls for an exemption
for data processing within corporate groups in
the insurance industry, an exemption which
should extend to medical data. Steps must
also be ­taken to ensure that §203 of the Penal
Code, which addresses the breach of confi-
dentiality duties by insurance employees, will
not apply if data is forwarded for processing
within the corporate group.
Outside companies and freelancers are also
used to perform special tasks, such as IT serv­
ices. When assessing risk, it may be necessary
to consult outside medical experts. External
specialists are also used for access to remedies
and medical services, as well as for assistance
services, such as treatment abroad or medical
evacuation.
All of these processes are in accordance with
insurance supervisory law and are based on
the data protection consent and confidentiality
release clause. In the interests of legal certainty,
however, lawmakers should make clear that,
in the cases mentioned above, data process­
ing is lawful and does not constitute a crimi-
nal offence even without the customer’s con-
sent.
In today’s media-driven society, with Digital ground rules:
internet and e-mail use widespread, it GDV supports the
is indispensable to maintain a very German government’s
high and reliable level of security in e-government
the forms of electronic communica- strategy
tion desired by consumers, customers
and partners. In GDV’s view, the federal
government must take responsibility for the
formulation of generally accepted and ade-
quate security standards and for creating the
necessary statutory conditions. Accordingly,
the German insurance industry welcomes and
supports the German government’s e-govern-
ment grand strategy.
The issues of electronic identification and
­secure de-mail are particularly important. The
new electronic ID will enable fast, secure and
flexible authorization and authentication in
the digital world: communication partners

will be able to rely on the accuracy of the
transmitted data. Since the German insurance
industry is always concerned with ensuring
utmost security in electronic communication
processes, German insurers are actively in­
volved in investigating ways to implement
­secure authentication in these digital com-
munication processes.
In addition to secure authentication, secure
online messaging is also a major issue with
­respect to the creation of a secure digital
lands­cape. For this reason, the German insur­
ance industry is also a testing partner in the
German government’s “de-mail project” to
­design a secure and yet easy-to-use e-mail
infra­structure. In this way, insurance compa-
nies will be able to communicate with their
cus­tomers and partners quickly, conveniently
and, above all, securely, and conclude con-
tracts electronically using electronic Ids and
de-mail.
Retirement planning, In the midst of the financial crisis,
the financial market many people were asking themselves
crisis and if their retirement provisions were still
life assurance safe. The pension reforms in recent
­years have transferred a considerable
amount of responsibility to funded retirement
provisions, and the Riester numbers alone (the
government estimates over 12.6 million con-
tracts at mid-year) demonstrate that many
people have accepted the change of policy
and are acting accordingly. In light of the
­disastrous reports about failing banks, stock
markets crashing all over the world, collapsing
markets and costly government interventions,
there was understandable concern about the
safety of private and occupational retirement
provisions.
2009 YEARBOOK 27
But funded retirement provisions Funded retirement
in Germany remained very stable provisions: stable in
through­out the crisis. In fact, the crisis
­Germany is envied all over the world
for the safety of its retirement provisions.
­After all, the decisive factor in retirement
­planning is how to use the capital markets.
Funded retirement provisions are not a get-
rich-quick scheme: they have nothing to do
with short-term speculation or “playing the
yield curve,” as a number of companies tried
to do, with fateful results. Instead, it is about
accumulating assets over a period of three to
four decades to enable the payment of bene-
fits for several decades after that. The accu-
mulation of assets and use of the capital
­markets are merely a means to an end. There-
fore, it is entirely wrong to suggest that retire-
ment provisions serve only to “play the mar-
ket” in some way. The opposite is true.
German life assurers in particular German life assurers
have proved to be a stabilizing factor a stabilizing factor
and have justified the confidence
that was placed in them. Their investments
have traditionally been guided by the principles
of security, liquidity, profitability, diversifica-
tion and risk spreading. Their capital buffers
and careful investment practices proved their
worth during the crisis. Even under the extreme
conditions which prevailed in the financial
28 2009 YEARBOOK VIEWPOINTS
markets last year, life assurers were able to
meet their obligations from insurance con-
tracts. While the DAX lost almost 40 per cent
of its value in 2008, life assurers were able to
pay their customers a net return of over 4 per
cent, even in this year of crisis. With respect to
the timing of the payouts, it made no difference
to the customers whether they received their
returns before or after the financial crisis.
This was no accident: regulatory rules for pri-
vate and occupational retirement provisions
require providers to handle their resources re-
sponsibly.
Retain criteria for The more people become dependent
state-subsidized on the second and third pillar of the
pensions social security system, the greater
the need to formulate appropriate
rules for the pension markets. Experiences in
recent years have made it abundantly clear
that retirement planning is not just a matter
of saving money. Funded retirement provi­
sions have to secure a retiree’s living expenses
through entire life phases: their purpose is to
replace lost income, whether due to early
death, disability or old age.
That is no simple matter: unlike collective life
expectancies, the actual length of an indi­
vidual’s life cannot be calculated in advance.
Only as part of a community of insured per-
sons in the statutory, occupational or private
systems can each individual be assured of life-
long support without having to worry about
outliving his or her financial resources and
­having to accept a reduced living standard in
old age. Moreover, it is a sensible proposition
that only investment forms which refrain
from taking on incalculable capital market
risks should receive taxpayer support. For this
reason, the government’s support of Riester
pensions was tied to strict qualitative criteria.
The following criteria for state-subsidized
pensions are the foundation for secure private
and occupational retirement provisions in
Germany:
n protecting retirement assets from the risk
of using up the assets too soon (lifelong
support);
n protecting retirement assets from capital
market risks (guaranteed minimum bene-
fits);
n protecting retirement assets from being
used for other purposes (long-term commit-
ment of assets and preventing third-party
access);
n protecting retirement assets from provider
bankruptcy (capital adequacy).
In the interests of guaranteeing pension secu-
rity, the industry advocates maintaining these
criteria for state-subsidized retirement provi-
sions.

Avoiding overtaxing Whether from the Federal Bureau of
the social Statistics, the EU or research institutes,
security system all projections clearly show that our
society is aging: a trend which will hit
the social security system considerably once
the “baby boomers” reach retirement age.
­Policymakers have responded by enacting a
­series of painful but necessary reforms.
­Limiting pension growth, raising the retire-
ment age, introducing cutbacks in pensions
and the remeasurement of contribution-free
periods were inevitable to ensure that the sys-
tem will be able to meet the needs of future
retirees without overtaxing the limits of fu-
ture taxpayers. In other words, a sustainable
compromise was reached between the inter­
ests of young and old.
It all the more regrettable that actions moti-
vated by nothing more than electoral tactics
now threaten to undermine all that has been
accomplished. The desire for security clauses
in statutory pension insurance is understand­
able, but such clauses will make the system
harder to finance, while exacerbating the dis-
tribution conflict between current and future
retirees. Security clauses have an effect simi-
lar to that of raising pensions in times of weak
contributions. The insurance industry is op­
posed to any proposal which would shift the
already considerable “backlog” to contribu­
tion payers and taxpayers and thus jeopardize
the expected recovery and future growth.
2009 YEARBOOK 29
The danger of overtaxing the social Retirement provisions
security system also exists in connec- must not rest on a
tion with the issue of poverty among single pillar
the elderly. While a threat is posed by
intermittent joblessness, long-term unemploy­
ment and low wages, these are only secondary
factors and are not the cause of the problem
itself. Accordingly, they should not be viewed
as a problem to be “repaired” by pension policy,
but should instead be addressed through
growth and employment policies. Above all,
they should not be used as a reason to abandon
the gains in pension policy that we worked so
hard to achieve.
The stated goal of the pension reforms was to
create a multi-pillar social security system in
Germany. More and more people are seeking
additional sources of retirement income. As a
result, it would be incorrect to focus only on
statutory pensions when analyzing the risk of
poverty in old age. After all, for future retirees
more than ever before, one cannot truly speak
of poverty unless the total retirement income
of all household members is inadequate.
­Moreover, the only people who run the risk of
poverty in old age are those who are con-
sistently unable or unwilling to provide for
their retirement in different ways. Accordingly,
insofar as a social responsibility exists to sup-
plement the retirement income of the elderly,
this responsibility only extends to a very small
group of people.
30 2009 YEARBOOK VIEWPOINTS
Before support for the successful pension re-
forms disappears, we must make clear how
much we stand to gain from continuing on
this course:
n it will lend long-term stability to old-age
provision, since the system will no longer
be limited to a single financing method,
instead creating a balanced rela­tionship
between pay-as-you-go and funded retire-
ment income;
n it will improve the flexibility and accept­
ance of old-age provision, since the system
will offer more options and be more adapt­
able to individual preferences;
n old-age provision will cease to be as much
of a burden on production and employ-
ment in Germany, since labour costs would
be less correlated with old-age provisions;
n the system would be fairer and more sus­
tainable, since strengthening the funded
system would enable us to more evenly
spread the burden created by the demogra-
phic trend.
These gains must be protected!
No subsidies based The current pension policy has proven
on the watering effective, and should be continued.
can principle With a view towards a multi-pillar
social security model, the develop-
ment of private and occupational pensions is
indispensable. In times when public finances
are under pressure, subsidies must be dis-
pensed in targeted fashion, based strictly on
qualitative criteria. This means above all that
we must distance ourselves even further in
the next legislative session from the popularity
of the “watering can principle,” which states
that no distinction should be made between
asset accumulation, i.e. pure saving, and retire­
ment planning. One thing is clear: Germany’s
occupational pension system does not need a
sixth branch on the Anglo-American model, in
which risks are shifted to workers in one-sided
fashion. Nor does Germany need “retirement
accounts,” expensive shells which blur the
­distinction between private saving and occu­
pational pensions, and therefore blur respon-
sibility for defined benefits. Such apparent
­reforms would only hurt the pension system.
Instead, it is enough to implement a limited
set of measures within the existing frame-
work. Riester subsidies should be tied to the
contribution assessment limit in order to pro-
tect retirement assets from creeping deple­
tion due to inflation. The group of people eli­
gible for assistance should be expanded to
­include all persons with an unlimited tax lia-
bility. In addition, people should be allowed to
take advantage of unused subsidies later on in
the framework of private and occupational re-
tirement planning, in order to account for the
fact that the ability of people to set aside
funds for retirement may change in different
phases of their lives. In addition, retirement
assets should be better protected against early
depletion, whether through social law or the
Civil Procedure Code. In the occupational pen-
sion system, employers who want to outsource
pensions to a pension investment fund should
be allowed to transfer all periodic premiums
(future service) to the fund tax-free every year.
Finally, there is another weak point which
needs to be addressed. At the moment, not all
pension providers are required to maintain
enough capital to meet their guaranteed obli-
gations. Action is necessary with respect to
so-called “guaranteed funds,” which are not

currently subject to sufficient capital require-
ments. Providers who are unable to meet their
obligations in times of crisis undermine the
public’s confidence in the entire system.
Providing for More and more people are coming to
­retirement is more the realization that private and
than a savings occupa­tional retirement provisions
process are indispensable for them. It is highly
commendable that lawmakers and
the fiscal authorities have not limited their
­efforts to the Riester and basic pensions, but
have also worked to shape and effect a lasting
improvement in the classic form of retirement
provision: endowment life insurance. The
prod­uct landscape has come into clearer focus
with a sense of proportion: it is now very clear
and comprehensible to consumers and provid­
ers alike that retirement provisions would be
unthinkable without the assumption of bio-
metric risk, in contrast to simple savings and
investment products. It is now clear that
retire­ment planning is and will always remain
much more than merely a ­savings process.
­Endowment life insurance in particular is a
­socially indispensable retirement planning
product which can help every one of us take
steps in advance to fill calculable gaps in our
retirement support net, and this is equally
true for conventional annuity insur­ance, of
course. The fiscal authorities have ­clarified the
tax laws in this regard, stating that an insur­
ance policy is only assumed to be annuity in-
surance if coverage of the longevity risk is
­guaranteed upon conclusion of the contract.
To that end, the contract must either promise
a guaranteed (minimum) annuity or specify
an annuity factor.
2009 YEARBOOK 31
The recent international discussion regarding
the European Commission’s proposal to
amend the EU Savings Directive does not
­appear sensible in this context. The proposal
would include life assurance products in the
Directive, meaning that insurers based in Ger-
many would be subject to new and costly
­reporting requirements. In the case of cross-
border transactions, payments to tax­payers in
other Member States would have to be re­
ported, in order to close ­alleged tax loopholes.
But such loopholes do not exist in Germany.
These proposals overlook the fact that, for all
endowment life insur­ance contracts con­
cluded since 1 January 2005, the insurer is re-
quired to withhold capital yield tax from the
payout amount. No sums can be disbursed
without with­holding taxes, even for cross-
border matters. Accordingly, no additional
­reporting obligations are necessary.
A far more productive gesture was Riester pension to
made by the European Court of become even more
­Justice, which ruled that, in the attractive
­future, even border-crossers are
­entitled to enjoy the financial advantages of
the state-subsidized Riester pension. This
­decision opens the Riester pension as an op­
32 2009 YEARBOOK VIEWPOINTS
tion for even more people wishing to make
private provisions for their old age. Specifi-
cally, this decision means that workers who
live and pay taxes abroad but who work and
pay social security contributions in Germany
are entitled to state-subsidized Riester pen­
sions. The ECJ Ruling also states that it may be
possible for border-crossers in the future to
use their state-subsidized Riester pension to
finance a home purchase abroad. Finally, ­there
is also good news for workers who were fully
taxable in Germany throughout their work
lives but choose to spend their retirement
­abroad: in the future, they will not be required
to return their Riester allowances if they leave
their homes in Germany and move to another
EU Member State. Lawmakers now have the
task of implementing these rulings in short
order. One thing is already certain: the Riester
pension will become even more attractive.
Consequences of Global climate change is becoming
climate change in noticeable in Germany as well, as
Germany we are already receiving reports of
clear changes in temperatures and
­ recipitation levels:
p models which seek to predict possible climate
n Over the past 100 years, Germany’s average
annual temperature has gone up by about
0.8°C.
n The warming trend accelerated consider­
ably in the past decades, and average tem-
peratures are now rising at a rate of 0.15°C
a decade, nearly twice as fast as before.
n The winter months have become warmer,
on average.
n The last ten years of the 20th century were
the warmest decade in the entire century.
n In nine of the years between 1990 and 2000
and in most of the years in the 21st century
so far, the average temperature has ex­
ceeded the long-term average of 8.3°C.
n Precipitation levels have increased consider­
able in the past 100 years, especially in
­western Germany. The increase is most
­evident in the winter. In eastern Germany,
on the other hand, precipitation levels
­decreased, especially in the summer.
These climate changes are also evident from
the unusual scale of extreme weather events
in recent years, such as heat waves and heavy
precipitation. These events are occurring more
frequently and with greater intensity, and are
lasting longer as well. Such extreme events
are economically relevant given the high
­potential for damages. Various climate research
models confirm the insurance industry’s per-
ceptions in this regard.
The scientific data is based on regional climate
changes in Germany until the year 2100. The
regional models are based on global climate
models, enabling comprehensive projection
of the climate development in Germany.
­Comparing potential climate scenarios for the
­years 2071–2100 with climate data for
1961–1990, the models show that
n regional and seasonal temperatures in
­Germany can be expected to rise by 1.5–
3.7°C;
n there will be fewer days of frost, more hot
days and topical nights, and the frequency
and duration of heat waves will increase;

n summer precipitation levels will decrease by
30 per cent on average, but the frequency of
heavy downpours will increase;
n glacier and snow coverage should decrease
in the Alps; and
n average sea levels could be 30 centimetres
higher than before. It should be kept in
mind that, for some of Germany’s coasts,
sea levels are expected to rise at a much
faster pace due to soil erosion and growing
tides.
Climate change a The insurance industry routinely cov­
challenge for the ers damages to buildings, inventories
insurance industry and motor vehicles as a result of storm
and hail events, and policyholders are
increasingly adding supplementary coverage
for flooding, heavy rain, avalanche and snow
(natural disaster risks). Over 20 per cent of
buildings in Germany already have this sup-
plementary coverage. These risks are directly
related to environmental conditions, so that
climate change can be expected to have a
­considerable impact on the frequency and/or
the severity of insured natural disaster risks.
It is to be expected that our economy and
­­society will increasingly experience extreme
weather events like heat waves and extreme
precipitation in the near future, events which
are associated with climate change. This will
also continue to be a topic of discussion in the
media and politics. Increased awareness of
these risks will create additional demand for
this kind of insurance coverage.
2009 YEARBOOK 33
More and more buildings are now equipped
with climate-friendly systems such as solar
energy, photovoltaic, geothermal or co-gen­
eration systems. Energy-efficient and “passive”
houses are long-established architectural
forms due to statutory rules for the use of
­renewable energy and energy efficiency, as
well as broad-based government incentives to
encourage such practices. In addition, a clear
consciousness for environmental issues has
taken root among the general public, and
­rising energy costs are also contributing to the
spread of sustainable forms of energy produc-
tion and consumption.
These developments involve changes in custo-
mer needs, and the industry will have to adapt
to these changes. Building insurers in particular
will have to develop new and forward-looking
methods in designing their products, and GDV
will support these efforts through the devel­
opment of non-binding standard policy condi-
tions for private property insurance, focusing
on the handling of integrated building engi-
neering systems, as well as aspects relating to
energy and the environment. GDV’s goal in
this regard will be to guarantee the insurability
of climate-friendly and forward-looking build­
ing use.
34 2009 YEARBOOK VIEWPOINTS
Loss events Although no one can say with abso-
financially lute certainty whether or not sudden
­manageable and large-scale climate changes
should be expected in Europe in the
decades to come, our current information in-
dicates that we will not see a fundamental
change in the character of the natural risks
described above. However, the available data
does indicate that individual loss events will
become more severe. Nevertheless, the mag-
nitude of this damage should generally re-
main within financially manageable bounds
for the German insurance industry. Still, the
possibility of extreme weather in the future
requires a great deal of additional research.
For example, our climate models are currently
unable to account for precipitation and hail
events which cause a great of damage but
­occur over a small area, and numerous ques­
tions need to be clarified in connection with
large-area storms as well.
In order to be better prepared for the future,
the German insurance industry has initiated
large-scale research projects in this area, and
will be contributing its expertise to this effort.
The industry is also engaged in intensive
­discussions with various Ministries with the
goal of launching joint research projects. A
broad-based research approach is needed
­because no one should make the mistake of
assuming that extreme weather in the future
is just an insurance matter. In fact, climate
change will impact social, cultural and eco­
nomic life in Germany in a variety of ways, and
will leave its mark in the fields of energy
­consumption, architecture, infrastructure and
agriculture.
Between 19 and 21 July 2007, in the town of
Baiersdorf in Bavaria, more than 130 litres of
rain per square metre fell within three hours.
In no time at all, numerous streets and more
than 1000 buildings were flooded. Most of
the building owners were not insured against
natural disaster risks. Immediately, there were
calls for emergency government aid and for
compulsory insurance. The Bavarian govern-
ment invited GDV and Munich-based insurers
for discussions, during which it be­came clear
that all of the affected building owners could
have obtained natural disaster coverage for
this event at acceptable terms without a prob­
lem.
In that case, the Bavarian government decided
to launch a campaign to convince building
owners to obtain insurance for natural risks.
Since the start of 2009, the government’s
campaign, “Think Ahead: Insure against
­Natural Risks,” has appealed to residents to
­insure their homes and possessions against
natural risks, calling upon homeowners and
tenants to take the appropriate precautions,
of which the right insurance policy is the best
example. At the same time, the government
made clear that, in the future, government aid
would only be dispensed in cases where
­damages to buildings and building contents
were demonstrably uninsurable. As a matter
of principle, it is always best for the public to

make provisions for risks on its own. This
­Bavarian campaign should serve as a model
for other Federal States.
Natural risks: As far back as the Elbe River flood in
no need for 2002, there was intensive discussion
­compulsory insurance regarding the introduction of compul-
sory insurance for natural risks, but a
working group led by the Ministry of Justice
came to the conclusion that such a compul­
sory insurance scheme would be in violation
of constitutional law. Nothing has changed
since then to alter this assessment. Further-
more, the insurance industry has constantly
optimized its risk models since 2002: in 2002,
just 93 per cent of risks were clearly insurable,
but this rate has since gone up to 98.5 per
cent. Even for the remaining 1.5 per cent of
risks, the insurance industry offers flexible
­solutions which address the risk of a cata­
stroph­ic loss. As a result, the debate with
­respect to a compulsory insurance scheme for
natural risks in Germany has now become
moot.
Moreover, such a scheme would not be an
­effective means of risk transfer. In the case of
natural risks insurance, for example, market
density would immediately jump from around
20 per cent to 100 per cent. This would mean
that insurers would have to build up ­several
billions of euros in capacity in just a short
amount of time, generally without the benefit
of historical values or solid data on ­potential
losses. As a result, insurance capa­c­ity would
inevitably be very expensive, and the added
costs would ultimately have to be borne by
policyholders.
2009 YEARBOOK 35
Finally, a requirement is only effective if
­compliance is monitored and violations are
penalized, and the bureaucratic expense for
these measures is often underestimated by
supporters of compulsory insurance schemes.
Insurers have intensively examined Emissions-based
whether current motor vehicle insur­ pricing offers no
ance rates should be converted into significant advantage
emissions-based rates in order to
­encourage the use of eco-friendly vehicles.
However, comprehensive studies have found
that the existing system creates considerable
incentives in favour of climate-friendly prac­
tices, since car owners who
n select a fuel-efficient vehicle (through model
type)
n limit mileage (through kilometre classes)
n adopt defensive and fuel-efficient driving
practices (through NCB classes) and
n buy a new vehicle with the latest techno­
logy (through the “vehicle age upon acqui-
sition” criteria)
pay far less in premiums than those who buy
and intensively use vehicles with poor fuel
­efficiency.
The industry’s studies also revealed that a
pure emissions-based pricing system, in
which rates no longer depend on use of the
vehicle and the resulting damages, would
mean that premiums would no longer be in
36 2009 YEARBOOK VIEWPOINTS
line with actuarial risk. As a result, many
­policyholders driving high-emissions vehicles
would actually see their premiums go down,
contrary to expectations, while policyholders
with low-emissions vehicles would pay more
in premiums. Accordingly, even today, any
­policyholder can save on premiums while also
cutting emissions and helping the environ-
ment simply by changing his or her habits.
For marine insurance as well, climate change
creates major challenges, given this line’s
­exposure to risks all over the world. Natural
events like the storm damage in New Orleans
have made clear that lack of transparency
with respect to the location of merchandise
owned by marine insurance customers ­creates
high risks for the insurance industry. Accord­
ingly, German marine insurers have begun to
develop a Cumulative Information System
(CIS). Through geographical classification of
stationary risks in the CIS, insurers will be able
to identify cumulative risks in a given geo­
graphical context.
Climate protection Climate change does not stop at
and adjustment ­national boundaries. Rather, the risks
strategies must associated with climate change
go together r­ epresent a major challenge for insur­
ers all over the world: the risks are
­almost inestimable. Rather than just sit back
and ­demand government aid, German insur­
ers are prepared to participate in the develop-
ment of concepts for dealing with the impact
of climate change and actively contribute to
the discussions which are being held in this
regard all over the world. The United Nations
will be holding a climate change conference at
the end of 2009 with the aim of drafting a
convention to take the place of the Kyoto
­Protocol, which expires in 2012.
The insurance industry believes that action is
needed now in order to meet the target of
­limiting global warming to under 2°C. In addi-
tion to agreeing on steps to limit climate
change, a comprehensive adjustment strate-
gy is also necessary. The effects of climate
change are already being felt, and concrete
precautions must be taken to prevent a prolif­
eration of natural disaster risks, such as those
arising as a result of storms, flooding and
droughts. Measures to mitigate the effect of
climate change must go hand in hand with
­efforts to adjust to the consequences of
­climate change.
Private health insurance (PHI) was Private health
once again at the centre of health care insurance at the
policy in 2009. The central event was centre of health care
the ruling issued by the Federal Consti­ policy
tutional Court on 10 June on the con­
stitutionality of the 2007 health reform (the
Act to Strengthen Competition in Statutory
Health Insurance). While the court dismissed
the industry’s complaints, its ruling strength­
ened the dual health insurance system, with
statutory and private health insurance co-
existing. A few months earlier, companies
were required to implement additional provi-
sions of the reform: since the start of the year,

insurers have offered the basic rate, which is
based on the benefits offered by statutory
health insurance, as well as a new universe of
products in full health insurance coverage
which offer limited portability of provisions
for increasing age. Another reform is turning
into a success story for PHI. When it came to
implementing the 2008 reform of long-term
care insurance, the industry ­decided to go its
own way: since the start of the year, “COMPASS
Private Pflegeberatung GmbH” has offered
customers at-home ­consultations nation­
wide, providing valuable assistance to its
­customers in familiar surroundings. Moreover,
the Citizens Relief Act ­adopted in June 2009
features substantial tax advantages for pri­
vate insurance customers starting in 2010,
­especially families with children.
Federal Constitutional In March 2008, 30 private health insu-
Court ruling rance companies, representing more
strengthens dual than 95 per cent of insured persons,
health care system filed a constitutional complaint with
respect to the new health care reform
legislation applicable to them. The motivation
for this action was a clear deterioration in con-
ditions for PHI, due in part to the mandatory
introduction of the basic rate, which is unsus-
tainable given its mandatory nature and the
associated premium cap. In June 2009, the Fe-
deral Constitutional Court dismissed the con-
stitutional complaint, finding that no unrea-
sonable burdens existed for the industry at
the time of the ruling. In fact, we were able to
relieve some of the difficulties for PHI created
by the health reform in the time that elapsed
since the constitutional complaints were filed.
2009 YEARBOOK 37
The Karlsruhe court expressly affirmed that
lawmakers have a “supervisory duty” to ensure
that the reform does not endanger the private
health insurance model in the future. More­
over, in the court expressly assumes in the
grounds to the ruling that the reform is meant
to preserve and strengthen Germany’s dual-
pillar health insurance model: a clear rejec-
tion of national insurance in any form.
The PHI will continue to fight to secure more
options for all insured persons. Not only
should lawmakers remove the arbitrary rule
requiring employees with incomes in excess
of the compulsory insurance limit to wait
three years before switching from SHI to PHI,
but the extraordinary increase in the compul-
sory insurance limit adopted in 2003 should
also be repealed. Despite these obstacles,
­private health insurance is still a growing in-
dustry. Net new business for full private
health insurance in 2008 was 69 800 persons
despite the fact that access was massively
­inhibited by the reform.
The problems in the financial markets Funded system
reduced the net returns of private proves crisis-proof
health insurers, but no company en-
countered serious difficulties due to the crisis
which broke out in 2008: the funded system
has once again proved crisis-proof. Statutory
health insurance, on the other hand, has
­demonstrably failed the “stress test” of the
38 2009 YEARBOOK VIEWPOINTS
­ nancial crisis: in the coming years, more than
fi
28 billion euros will flow into SHI in the form
of debt-financed federal aid in order to artifi-
cially reduce contribution levels and lull the
public into a false sense of security.
Our health care system can only survive if
­funded provisions take on a greater role, while
pay-as-you-go statutory health insurance
­focuses on its core functions. In order to ac-
complish this, services should be outsourced
one by one, e.g. starting with dental care, sick-
ness benefits and private accidents. This would
save statutory funds about 30 billion euros,
and the contribution rate could be cut by
­almost three points, or about 20 per cent. This
would give SHI customers the financial free-
dom of action they need to make sup­ple­
mentary provisions based on their own set of
priorities.
Citizens Relief Act Private insurance customers will now
helps families be able to deduct more of their pre-
miums than before for tax purposes.
The Citizens Relief Act, passed by Parliament
on 19 June 2009 and taking effect in 2010,
was enacted to implement a ruling by the
­Federal Constitutional Court in February 2008,
under which all expenses necessary to guar­
antee welfare-level support for the insured
person and his or her family are tax-deductible.
The new law will be particularly beneficial for
families.
Under the law, persons with private or sta­
tutory insurance will be able to deduct all
­premiums for “basic health insurance,” as
well as for private compulsory long-term care
insur­ance, for themselves, their children,
spouses and life partners, without limit.
­“Basic health insurance” is roughly equivalent
to the level of benefits from statutory health
insurance. For all benefits which go beyond
that level (such as elective hospitalization
­benefits), the ­sta­t­ute provides for standard
­industry-wide markdowns up to a maximum
of about 20 per cent, so that at least about
80 per cent of PHI pre­miums will now be tax-­
deductible.
Costs in private health insurance are Fee schedules:
increasing much faster than in statu- PHI favours
tory health insurance, due primarily to service-appropriate
the cost of medical services. Therefore, agreements
PHI endeavours to exert greater influ-
ence over the price, quantity and quality of
medical services. Unfortunately, lawmakers
missed an opportunity to amend the schedule
of fees for dentists accordingly during the
2005–2009 legislative session. Private health
insurers plead for an opening clause in
­schedules of medical fees which would allow
them to agree on service-appropriate fees in
fair and voluntary partnership with phy­
sicians, dentists and other service providers.
Founded by PHI, “COMPASS Private Consultations for
Pflegeberatung” has been in business 9.3 million private
since January 2009, offering services long-term care
nationwide based on consistent insurance customers
­standards. Since the start of the year,
COMPASS has been independently serving
around 9.3 million private long-term care
­insurance customers nationwide. Regional
­offices have been opened from Hamburg to
Munich, millions of letters written to insured
persons and several thousand consultations
conducted.

The “at-home” consultations offered by
­COMPASS for persons in need of long-term
care and their families is very different from
the concept of stationary care in statutory
long-term care insurance. COMPASS’s mobile
long-term care consultants serve as neutral
and independent guides. Instead of having to
come to the consultation office themselves,
clients can get the help they need in a per­
sonal conversation in familiar surroundings.
These services are an exemplary implementa-
tion of the Act to Improve Long-Term Care,
which creates a right to long-term care con-
sultations.
Primary prevention In 2009, private health insurers
does not require ­demonstrated once again that they
statutory imperative are prepared to engage in primary
­prevention efforts even without a stat­
utory imperative. In addition to the 3.5 million
euros which the PHI Association has provided
for AIDS prevention every year since 2005, the
Association is working with the Federal Centre
for Health Education on another project, for
which a contractual agreement was reached
on 8 June 2009 with the approval of the Minis-
try of Health. PHI provides 10 million euros a
year for “Know Your Limit,” an ambitious proj­
ect which is intended to fight alcohol ­abuse by
children and teenagers.
Revision of VAT rules The European Commission has pro­
for financial services posed a Directive to amend EU value-
added tax law, which originates from
the 1970s. Under the law currently in force,
­financial services companies essentially do
not have an input tax deduction for goods and
services acquired in the course of their busi-
ness activities, i.e. their VAT expense is defini-
tive, so that they end up paying more for the
services they acquire than companies with an
input tax deduction.
2009 YEARBOOK 39
One component of the proposed revision is
the redefinition of VAT exemptions. Retaining
the current exemptions for revenues earned
from the activity of insurance agents and
­brokers pursuant to §4 No. 11 of the VAT Act is
of fundamental importance in this context.
But the proposals which aim to minimize the
problems caused by the absence of an input
tax deduction are of even more decisive
­importance with respect to securing the com-
petitiveness of the insurance industry. The in-
troduction of a VAT exemption for specific and
essential components of tax-free financial
services would remedy a situation in which in-
surance companies are currently at a disad-
vantage. If such a rule were introduced, insur­
ance companies might be able to purchase e.g.
claims settlement or underwriting services
from third parties without having to pay VAT.
GDV also welcomes plans to introduce a
­so-called “VAT-neutral cost sharing arrange-
ment,” in which suppliers of exempt financial
services could form a group to exploit synergy
effects, providing necessary input services
and passing them on VAT-free to the other
members of the group. Another positive as-
pect of the proposal is that it would require
the Member States to introduce a right of
­option for taxation for all financial services.
This would allow the provision of services
with VAT for customers with input tax deduc-
tions, bringing down the total cost. At the
­moment, this option extends only to banks,
not to insurance companies.
40 2009 YEARBOOK VIEWPOINTS
Integrate fire safety In their deliberations with respect to
tax into the Federalism Reform II, the federal and
insurance tax state governments have not been
able to reach an agreement on inte­
grating fire safety tax into the insurance tax, as
proposed by GDV. We will continue to pursue
this proposal, which aims to abolish a minor
tax and eliminate unnecessary bureaucratic
expenses for the fiscal authorities and the in-
surance industry. In exchange for the loss of
fire safety tax revenues, fire brigades would
re­ceive at least as much in insurance tax rev­
enues.
Cross-border business The German insurance industry says
increases for German “yes” to the internal market for insur­
insurers in Europe ance. Thanks to the new opportu­
nities afforded by the internal mar-
ket, the activities of German insurers in other
EU Member States have increased sharply in
recent years. Numerous subsidiaries and of­fices
have been formed in other Member States,
and the various European markets have be-
come far more interconnected. Cross-border
business is growing, and we are beginning to
see the first examples of Europe-wide product
and marketing strategies.
While statutory conditions for insurers are
much better, e.g. thanks to the harmonization
of insurance supervision and company law,
the various European markets are far from
being fully integrated.
The markets continue to be especially frag-
mented with respect to private customers
and small and mid-sized enterprises. German
insurers are currently unable to exhaust the
potential for Europe-wide products, marketing
or distribution, as the laws vary too much
from country to country. EU consumer protec-
tion rules have hardly been harmonised. Cross-
border activities are also complicated by in-
consistencies in contract and tax law, in addi-
tion to the natural obstacles to cross-border
activities, such as language, market traditions,
differences in the handling of losses and
­divergent rules with respect to retirement
provisions.
The internal market must be further Creating balanced
developed by eliminating these ob­ terms for fair
stacles to create a single European ­competition
insur­ance market. After all, effective
insur­ance markets are indispensable if the
­European internal market is to continue to
grow and if the European economy is to remain
competitive in a global context.

Insurers believe that creating balanced terms
for fair competition, and consistently applying
the level playing field principle, are high-­
priority goals for the internal market. In a
­European internal market for insurance, there
can be no room for national competition, for
regulatory and tax arbitrage between Member
States. Especially in the field of supervisory
law, allowing a situation in which countries
compete for the lowest standards would not
only be dangerous for consumers, but for the
realization of a European insurance market as
well.
Allowing cross-border Underneath the large-scale
insurance coverage ­solutions for a European insur­
ance market are the day-to-day
insurance problems which EU citizens face
­today. Millions of people are now exercising
their right of free movement to live and work
in another Member State, including the right
to have access to insurance coverage after
moving to another Member State. It is there-
fore essential, in GDV’s view, to make it easier
for EU citizens to obtain insurance coverage
abroad. EU lawmakers must act now. They
must take the initiative to create a European
insurance market with largely consistent
­conditions throughout and make it easier for
EU citizens to obtain insurance.
2009 YEARBOOK 41
The block exemption regulation for Block Exemption
the insurance industry expires in Regulation only
March 2010. At the moment, the partially extended
block exemption regulation provides
a secure basis for the four most important
forms of insurance industry cooperation:
­actuarial and loss prevention work, standard
policy conditions and co-insurance commu­
nities.
However, the EU Commission has announced
that the block exemption regulation (BER) will
be extended only for actuarial work and co-­
insurance communities. In other words, the
EU Commission proposed allowing the BER to
expire with respect to standard policy con­
ditions and loss prevention work. The German
insurance industry has consistently called for
retaining the BER in these two areas as well in
the interests of promoting competition, since
the insurance industry depends on inter-com-
pany cooperation more than any other sector.
This follows from the essence of the insurance
business: the coverage of an uncertain risk at
an uncertain time. Un­fortunately, however,
the EU Commission was not prepared to
­extend the entire BER. At least, it has been
achieved that the EU Commission will prob­
ably issue guidelines for the insur­ance indus­
try in these two areas, although those guide­
lines will be binding only for the EU Commis­
sion itself, not for the courts and for national
42 2009 YEARBOOK VIEWPOINTS
competition authorities. Nevertheless, we
­expect that cooperation can con­tinue un-
changed beyond March 2010 on this basis. An
inability to do so would have a negative im-
pact on competition, since small and mid-
sized companies in particular are depend­ent
on this form of cooperation. Moreover, as far
as loss prevention work is concerned, no other
sector is willing and able to take action with
the same expertise and in the same scope as
the insurance industry.
Disclosure of Insofar as a new BER will be adopted
data would place for actuarial work and co-insurance
actuarial work pools, steps must be taken to ensure
at risk that the extension is not rendered
meaningless for the insurance indus-
try. For example, the EU Commission’s interim
report proposes an option under which the
exemption of actuarial data would be made
contingent upon disclosure to inter­ested third
parties. Right now, this data is made available
only to insurance companies themselves, and
the ability to access this data may be limited
to companies which partici­pate in its compila-
tion by supplying their own data. If the data
has to be disclosed, large companies which
have adequate data of their own would no
longer have any interest in reporting their
data to associations like GDV. In that case,
smaller and newer companies would have
considerable difficulties estab­lishing and
maintaining themselves in the market. No
other economic sector is required to disclose
its data.
German Insurers Accident Research Traffic safety:
provides researchers, carmakers and accident researchers
policymakers with fundamental and call for better
indispensable data in connection with utilization of existing
the shaping of potential fields of opportunities
­action in traffic safety. Although
­Germany has made considerable progress in
­recent years with respect to the number of
traffic fatalities, there is still a lot of work to be
done. The most important thing for insurers is
taking advantage of known opportunities.
For example, German Insurers Accident Re-
search is working closely with carmakers to
promote the use of effective electronic driver
aid systems. However, the case of the Electron­
ic Stability Program (ESP) has demonstrated
that, at times, clear guidelines are needed
from EU lawmakers. Despite the fact that this
technology, which features by far the greatest
life-saving potential, has been available since
1995, there are still a large number of new
cars, particularly smaller cars, which do not
come with a slippage control system. Now
that all new models will be required to feature
ESP standard starting in 2011, consideration
should be given to requiring emergency
­brakes, as will be the case for lorries and buses
start­ing in 2013.

But we cannot stop at our cars: we must also
make our roads safer. Both in rural roads,
­where accidents tend to occur in alleys and
­intersections, and on urban streets, where the
most common accidents are pedestrian and
bicycle accidents, there is much room for im-
provement in the area of traffic safety. Ger-
man Insurers Accident Research has shown
that traffic lights should have a separate green
arrow for left turns, and that the deactivation
of traffic lights at night creates a substantial
accident risk. It is the responsibility of local
­officials to derive the appropriate measures
from the data we have released.
Insurance European insurers estimate that the
fraud drives up damage caused by insurance fraud in
premiums casualty, property and accident insur­
ance alone accounts for between 5
and 10 per cent of total claims expenditures.
In other words, fraudulent insurance claims in
Germany cost up to EUR 4 billion a year. Given
the size of this figure, of course, this problem
affects premiums in all insurance lines.
There is no such thing as a typical perpetrator
of insurance fraud. On the one hand, insurers
have to deal with professional criminals who
perpetrate large-scale insurance fraud as re-
peat offenders or in the context of organized
crime, often devoting a great deal of energy to
the perpetration of their crimes. An example
of this type are staged auto accident rings, in
which criminals provoke car accidents, some-
times at the risk of physical injury to their
victims, in which they pose as victims and
charge the cost of their repairs to the insur­
2009 YEARBOOK 43
ance company of the person alleged to have
caused the accident. They will then perform
only emergency repairs to their vehicle, or
none at all, and move on to provoking their
next accident.
At the other edge of the spectrum Insurance fraud:
are the occasional offenders, who a minor offence to
may file an illegitimate claim for an 30 per cent of the
actual loss or intentionally inflate population
the amount of the loss, e.g. by in­
cluding additional losses which had nothing
to do with the actual insurance event. Private
liability insurers, building contents insurers
and motor comprehensive cover insurers are
particularly vulnerable to this type of fraud.
Another reason for concern in this regard is
the fact that studies have shown that almost
30 per cent of the population continues to
view insurance fraud as a minor offence.
In order to protect honest insured persons,
the vast majority, it is vital to combat this phe-
nomenon. However, insurers understand that
fighting fraud is ultimately a social responsi-
bility, since the conduct in question is criminal
in nature. Accordingly, insurers are taking a
variety of measures, such as training employ­
ees the creation of internal fraud detection
systems, establishing special departments for
this purpose and working closely with the
44 2009 YEARBOOK VIEWPOINTS
STANDPUNKTE
­police. Given the scale of this phe­nomenon,
however, as described above, it is clear that in-
surers will be unable to win this struggle as
individual companies: industry-wide action is
necessary.
Updated DIS The insurance industry’s Detection
­improves and Information System, DIS for
­transparency short, combines the data of each
­individual insurer to create an indus-
try-wide resource for the fight against fraud
and insurance abuse. It has been available to
insurers since the early 1990s. The system
­allows insurers to review claims with a view
towards the possibility of fraud, filter out sus-
picious cases and subject those cases to a full
investigation. In the case of motor vehicle ac-
cidents, for example, the DIS will warn insur­
ers whenever insurance claims are filed
against multiple insurers for one and the
same loss.
The system is the result of decades of expe­ri­
ence handling fraudulent insurance claims,
and complies with applicable court rulings.
The DIS is currently being updated to fea­ture
more advanced technology as well as more
transparency. As of April 2009, anyone can ask
GDV whether an entry exists for him or her in
the DIS.
In the aftermath of the global finan­ Regulatory reforms
cial crisis, proposals for a comprehen- US and EU rules
sive reform of financial services regula­ must be compatible
tion have been discussed not just in
the EU, but also in the US, where the financial
crisis began. While there is no support in the
US for the idea of an all-in-one regulator for
banks, securities and insurance, various pro-
posals have been advanced by the US ad­
ministration and Congress to reform existing
regulatory bodies. These include improving
cooperation between the various financial
ser­vices regulators by creating a new coordi­
nating body, the Financial Services Oversight
Council, the introduction of a “systemic risk
regulator” and the creation of a new “Finan­
cial Services Consumer Protection Agency.”
Since insurance regulation in the US is cur-
rently the exclusive province of the individual
States, the National Association of Insurance
Commissioners (NAIC) has proposed reforms
of its own in an effort to protect its influence,
although these proposals are limited to rein-
surance companies.
GDV and its member companies with opera-
tions abroad want to ensure that the ongoing
reform discussions do not culminate in the
adoption of contradictory supervisory rules in
the EU and the US, or rules which are inconsis-
tent without objective justification, as such
differences would create unnecessarily costly
or redundant reporting duties.
 2009 YEARBOOK 45

The Doha Round: Since 2000, WTO Member States have For these reasons, German insurers expressly
conclusion been negotiating rules for the free and welcome the intensive resumption of the
in 2010 necessary open global trade of goods and ser­ Doha negotiations in 2009 and the definition
vices in the so-called “Doha Round.” of modalities for the trade agreements. This is
Among other points, the Member States have the only way to create a reasonable legal
discussed ways for financial services pro­ framework for a level playing field in interna-
viders, such as insurance companies, to obtain tional trade. The further opening of global ser-
access to foreign markets and establish them- vice markets which should result from these
selves there (the General Agreement on Trade negotiations will liberalize insurance markets
in Services, or GATS). The negotiations have as well, so that individual countries and the
addressed issues relating to the opening of EU will not have to go to the trouble of nego­
markets in the respective Member States, tiating bilateral trade agreements.
such as whether and in what form foreign
providers of financial services and foreign in-
surers can establish offices in each country
and what restrictions exist with respect to
ownership and investment. In many cases,
­national rules currently hinder the activities
of foreign service providers and investors. As a
result, it is often difficult for German insurers
to operate abroad, and even impossible in
some cases given financial considerations.

A conclusion to the Doha Round in 2010 is

­urgently needed in order to give German
insur­ers more freedom of action and create
positive synergies with foreign markets. The
G20 states should identify this as a high pri­
ority in their respective negotiations, as politi-
cal conditions at the moment are a strong
­argument in favour of a rapid conclusion, es-
pecially since free and open global trade is in-
dispensable if the global crisis is to be over-
come anytime soon.
XX Jahrbuch
2009
2009
YEARBOOK Geschäftsverlauf, Leistung und Umfeld 46 | XX
Jahrbuch 2009 47

Business trends, results
The shockwaves on the international banking and financial markets last year led to the
greatest collapse in economic performance both in Germany and worldwide since the middle
of the last century. Global growth and world trade retracted even more sharply than during
the Great Depression of the 1930s. Assuming surplus liquidity on the worldwide interbank
market, a huge price bubble formed on the US real estate market through poorly secured real
estate credits in the United States and their bundling and sale to the international capital
markets. When this bubble burst, banking and financial markets worldwide were taken down
as well. Only massive intervention by central banks and governments on a global level was

and environment of private insurance able to prevent a total collapse of the financial system. Germany was also hard hit by the
effects of the banking and financial crisis. German banks too had a large volume of
problematic securities on their books. And as a very export-oriented economy, Germany
has suffered particularly from the slowdown in world trade.
48 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
After an already clear slowdown in economic
growth in 2008, the greatest decline in
econom­ic performance since the end of the
Second World War occurred in Germany and
worldwide in the course of 2009. The shock-
waves in the ever-more imbalanced banking
sector, the collapse of institutions and govern-
ment rescue efforts cast a far more dramatic
pale over economic conditions at the start of
the year than was foreseeable in mid-2008.
With liquidity and the supply of credit coming
to a standstill as a result of a broad collapse of
national and international interbank markets,
and with the adjusted expectations of market
players, investment activity worldwide was
wound down. In light of the crisis, American
consumers moreover sharply reduced their
demand for products in the United States, the
place where the crisis started in the form of a
price bubble in the real estate sector and
­rampant speculation on the securities mar-
kets, above all in real-estate-backed securities.
The sharp decline in these major pillars of the
global demand for goods led to a drop in world
trade activity unparalleled in recent history.
With its focus on foreign trade, the German
economy was particularly hard hit, as were
other major exporter nations, such as Japan.
While it could still be assumed at the end of
2008 that the crisis would largely be restricted
to the industrialised nations, it soon became
apparent that the emerging countries would
suffer from the global economic slowdown to
a significant degree. The great dependence on
world trade that had developed in some of
these countries in the course of globalisation
and the price drops in particular raw materials
led to a very sharp decline in economic perfor-
mance in some emerging countries. This ini­
tially unanticipated synchronisation of eco­
nomic performance helped to make the crisis
much worse than was at first assumed. Only
in China and to some extent India did eco­
nom­ic growth prove to be comparatively
­robust. China’s economy will not expand at a
much lower rate this year than it did in 2008.
This is primarily due to government stimulus
meas­ures in China, which constituted the
world’s second highest degree of spending to
buttress economic development.
In general, as a reaction to the dramatic de­
velopments in the banking sector and then
the entire economy, government recovery
­packages were established on a scale never
before seen in history. In light of the collapse
on the interbank markets, central banks made
additional liquidity available to a previously
unknown degree. In addition to the liquidity
supply in the commercial banking sector,
some central banks also began to acquire
claims directly in other economic sectors.
Governments worldwide were forced to react
to the global drop in demand with economic
stimulus packages. Government spending
measures of several trillion euros were ap­
proved. The measures adopted by the German
 2009 YEARBOOK 49

Federal Government within the framework of working time models by companies. To date,
Economic Stimulus Packages I and II were in- the global economic crisis has therefore not
tended to mitigate the effects of the global hit private households in Germany – which
slowdown, which had hit Germany’s export- account for over 80 per cent of insurance
oriented sectors hard. Through various mea­ ­demand – with full force.
sures, the governments by and large managed
to prevent a greater global collapse of banks. However, the outlook for future economic
­development in Germany and around the
In Germany, the drop in foreign demand for world is fraught with uncertainty. The prob-
investment goods caused historic declines in lems that triggered the crisis on the financial
manufacturing industries in orders received markets have not been completely rectified.
and production. Imported in this fashion, the Internationally, but also in Germany, the
recession took its massive toll on the German ­balance sheets of a large number of banks are
economy. Gross domestic product will sharply still encumbered with a large degree of “toxic”
retract in 2009 in real terms. While invest- securities. In addition, an increase in the
ment activity and foreign trade decreased as ­default rates of credit portfolios as a result of
never before since the foundation of the Feder­ the crisis could again leave banks with earn­
al Republic of Germany, private consumption ings and liquidity problems, as the banking
in contrast remained surprisingly stable. The sector has been particularly strained by the
crisis has not been felt by private households crisis to date. Renewed turbulence or im­
to date. This is attributable to the distinctly balances might thus have a significant effect
upward nominal wage growth toward the on real economic growth.
end of 2008, which profited in part from sharp
collective wage increases. In addition, the
­inflation rate has been sharply decreasing
since the start of the year. Thus, real available
income for private households has remained
nearly unaffected until now, despite the eco-
nomic development. This is primarily attribut­
able to the still positive state of the labour
market conditioned by labour market policy
measures, above all the expansion of short-
time work regulations. The merely moderate
increase in unemployment (after seasonal ad-
justments) in the course of the previous year
thus had a clearly supportive effect on the
­financial situation of private households in
Germany and hence on consumer behaviour.
This was also achieved through flexible use of
50 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
Yet even without new setbacks in the banking
sector, further risks exist for a potential
­economic recovery, despite the floor that has
­currently formed. The expiry of economic
­stimulus aid next year could lead to a reversal
of the slight economic growth currently an­
ticipated. The recovery could also prove to be
too weak to help already significantly chal­
lenged businesses – above all in the export
sector – achieve a true upswing in light of the
tense business situation. An increase in insol-
vencies would have fatal effects on the ­labour
market, which are now essentially being
­propped up through the expansion of short-
time work. But these economic policy mea­
sures will also expire next year with the poten­
tial negative impact on the labour market and
the financial situation of private house­holds
and thus German domestic consump­tion.
This rising insecurity concerning macro-eco-
nomic development is bringing many enter-
prises and private households to reassess the
value of reasonable insurance protection.
­Security and predictability are taking on more
relevance as a reason to buy insurance prod­
ucts. Insurance protection has not lost any of
its importance as a fundamental component
of the economic process that renders many of
the risks associated with financial planning
controllable. In fact, the opposite is the case.
The German insurance industry could stand
to profit from this in the future.
2009 business trend
Despite the financial and economic crisis,
­premium income in the German insurance
­industry developed robustly in 2009, even
compared to other sectors and insurance mar-
kets. The fact that the financial situation of
private households – which account for over
80 per cent of insurance demand – has not
materially deteriorated contributed to this
­development. Long-term factors (such as in-
tensive competition, a high degree of market
penetration, moderate claims, the increasing
number and weight of political reforms and
pro­cedures), and not so much the recession,
have had an impact on premium growth. Yet
the ­financial and economic crisis also presents
­opportunities for German insurers. The re­
liability and security of risk assurance and old-
age provision have again taken on importance
in the current market environment.
In 2009, the insurance industry registered an
overall gain in premiums of 3.1 per cent (2008:
1.0 per cent) over the previous year to 169.6
billion EUR. The anticipated growth is again
borne by personal insurance. While life assur­
ers (including Pensionskassen and pension
funds) have registered premium growth of 4.8
per cent to 83.4 billion EUR, private health in-
surers are anticipating growth of 4.0 per cent
to 31.5 billion EUR. Casualty, property and ac-
cident insurers interpret current figures as in-
dicating a minor gain in premiums of 0.2 per
cent to 54.7 billion EUR.
 2009 YEARBOOK 51

The course of 2009 in life assurance was in­
fluenced by the capital market crisis and the
need for security. Trust in the capacity of life
assurers to fulfil their benefit commitments
led to an unexpectedly sharp rise in single pre-
miums in new business and thus to a sharp
growth in premium income. This was above
all evident in pension assurance for single pre-
miums. The trend toward single premiums is
also being promoted by the increasing flex­
ibility of products; many life assurers are now
providing an option for special payments.
Life assurers, Pensionskassen and pension
funds together registered gross premiums
written of 39.6 billion EUR in the first half of
2009, 38.1 billion EUR of which were attribut­
able to life assurance in the narrow sense. This
corresponds to a gain of 6.6 per cent over the
previous year. For 2009 as a whole, Germans
are expected to pay premiums of 80.1 (pre­
vious year: 76.3) billion EUR on life assurance in
the narrow sense and a further 3.3 (previous
year: 3.3) billion EUR on Pensionskassen and
pension funds.

Premium income in private insurance

Gross premiums written, German direct business
Insurance classes 2009*) 2008 2007
change change
EUR bn as % EUR bn as % EUR bn
Life assurance1) 83.4 4.8 79.6 0.8 79.0
Private health insurance2) 31.5 4.0 30.3 2.9 29.5
full and supplementary cover 29.4 3.8 28.4 2.8 27.6
private compulsory long-term care insurance 2.1 6.6 2.0 4.6 1.9
Casualty, property and accident insurance3) 54.7 0.2 54.6 0.2 54.5
motor insurance 20.1 – 1.5 20.4 – 2.1 20.8
general liability insurance 6.8 0.0 6.8 0.1 6.8
accident insurance 6.4 1.0 6.4 0.7 6.3
legal expenses insurance 3.2 0.0 3.2 1.4 3.2
property insurance 14.9 2.1 14.6 4.0 14.0
industry/commerce/agriculture 5.6 1.0 5.6 2.4 5.5
private property insurance 7.8 3.0 7.6 5.0 7.2
thereof comprehensive insurance on buildings 4.7 5.0 4.4 7.3 4.1
thereof comprehensive insurance on contents 2.6 0.0 2.6 1.0 2.6
Marine insurance4) 1.7 0.0 1.7 – 6.9 1.9
Credit, suretyship and fidelity insurance 1.4 0.0 1.4 0.4 1.4
Total of GDV members 169.6 3.1 164.5 1.0 162.9
*) Projected based on data from reports until June 2009, 1) gross premiums written, not including premiums from bonus and rebate provisions, 2) including ancillary services,
but not including premiums withdrawn from bonus and rebate provisions, 3) German direct business, not including aviation, nuclear and pecuniary liability insurance, in-
cluding roadside assistance, 4) marine insurance, including carrier’s liability and special classes – Source: GDV; PHI Association.
52 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Insurance benefits and claims paid

Expenditure and provisions for the policyholders’ benefit made by direct insurers within GDV
Insurance classes 2009*) 2008 2007
change change
EUR bn as % EUR bn as % EUR bn
Life assurance1), benefit payouts 72.9 1.0 72.1 8.6 66.4
Private health insurance, benefit payouts 21.4 6.0 20.2 6.7 18.9
medical expenses 20.7 6.0 19.6 6.7 18.3
compulsory long-term care insurance 0.7 6.7 0.6 6.9 0.6
Casualty, property and accident insurance2) 42.6 1.7 41.9 – 0.4 42.0
motor insurance 19.3 – 1.3 19.6 2.4 19.1
third-party liability insurance 4.6 0.5 4.6 3.6 4.4
accident insurance 2.9 3.0 2.9 1.5 2.8
legal expenses insurance 2.5 9.0 2.3 2.4 2.2
property insurance 10.3 – 0.2 10.3 – 9.5 11.4
industry/commerce/agriculture 4.2 – 0.5 4.2 – 6.4 2.9
private property insurance 5.1 0.0 5.1 – 14.0 5.9
thereof comprehensive insurance on buildings 3.7 0.0 3.7 – 18.2 4.5
thereof comprehensive insurance on contents 1.2 2.0 1.1 0.3 1.1
Marine insurance 1.4 15.0 1.2 – 5.0 1.2
Credit, suretyship and fidelity insurance 1.5 50.0 1.0 37.2 0.7
Total of GDV members 136.9 2.0 134.2 5.4 127.3
*) Projected based on data from reports until June 2009, 1) including Pensionskassen, 2) German direct business, not including aviation and nuclear, aircraft and spacecraft
liability and pecuniary liability insurance, including roadside assistance – Source: GDV; PHI Association.

Life assurance in the narrow sense is expected
to account for 91.5 million contracts at year-
end 2009, thus slightly below the previous
year’s level, while the number of contracts
with Pensionskassen and pension funds is
­expected to grow.
As in previous years, payouts to life assurance
customers were also high in 2009: around
33.2 billion EUR in benefits was paid out on
life assurance in the narrow sense in the first
half, signifying 0.7 per cent more payouts to
customers than in the first half of 2008. All in
all, around 72.9 billion EUR could be reached
(+ 1 per cent) in 2009.
In the first half of 2009, nearly 3.0 million new
contracts in an insured amount of 109.5 bil­
lion EUR were concluded in life assurance,
Pen­sionskassen and pension funds. The num-
ber of new contracts thus decreased by 7.2 per
cent, the insured amount by 11.3 per cent.
Overall, around 6.2 million new contracts are
expect­ed to be concluded in 2009 in life assur­
ance in the narrow sense (– 7 per cent); new
business with Pensionskassen and pension
funds is ­anticipated to amount to 6.5 million
contracts.

Periodic premiums for one year from new life
assurance, Pensionskassen and pension fund
business in the first half of 2009 (2.6 billion
EUR) were 27.3 per cent below the value from
the first half of 2008. However, the rate of
change in periodic premiums was influenced
by increases triggered by the last Riester
assist­ance stage in the spring of 2008. Single
premiums from new contracts increased in
the first half of 2009 by 44.4 per cent to 8.7
billion EUR, largely attributable to private an-
nuity insurance. As a result, total premiums
written for new contracts amounted to 11.3
billion EUR in the first half of 2009 (+ 17.7 per
cent).
The weight of single premiums from new
business of life assurers in the narrow sense
must be put into perspective, however, by
­taking the total premiums from new business
into account: This figure includes new con-
tracts with periodic premiums at the total
premium amount over the entire term of the
contracts as well as contracts for single pre­
miums at the single premium amount. The
­figure is thus a measure of sales success, and
also indicates the willingness of customers to
bind themselves to long-term assurance con-
tracts. Total premiums for new contracts for
life assurance in the narrow sense reached a
value of 65.3 billion EUR in the first half of
2009 (22.3 per cent). Single premiums reached
a value of 8.5 billion EUR (+ 44.0 per cent), so
that 56.8 billion EUR (– 27.2 per cent) was at-
tributable to periodic premiums. Periodic pre-
miums for one year from new contracts
reached 2.5 billion EUR (– 27.7 per cent). To
­adjust for the aforementioned Riester effect,
the increments from Riester contracts can be
removed from total new contracts: The cor­
2009 YEARBOOK 53
responding adjusted figure for new contracts
with periodic premiums amounted to 2.3 bil­
lion EUR in the first half of 2009, correspond­
ing to – 9.5 per cent. For 2009 as a whole,
­single premiums of around 18.0 billion EUR
(+ 45 per cent) are anticipated in life assur­
ance in the narrow sense. Periodic premiums
from new contracts could reach a scale of 5.7
billion EUR (– 17 per cent). New contracts for
Pensionskassen and pension funds will increase
these premiums even further.
For 2009, private health insurers anticipate
premium income totalling 31.5 billion EUR
(+ 4.0 per cent), of which 29.4 billion EUR
(+ 3.8 per cent) is attributable to health insur­
ance and 2.1 billion EUR to long-term care in-
surance (+ 6,6 per cent). Premium income in
the first half of 2009 amounted to around
15.8 billion EUR, 11.3 billion EUR of which was
attributable to full health insurance and nearly
1.1 billion EUR to private long-term care insur­
ance. The premium volume in sickness ­daily
allowance insurance in the first half amount­
ed to 510 million EUR and in supplementary
PHI insurance (elective benefit rates, outpatient
rates and dental rates) to nearly 2.1 billion EUR.
54 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
Insurance benefit payouts (including claim
settlement costs) should reach 21.8 billion
EUR by the end of 2009, with 21.1 (+ 7.9 per
cent) billion EUR attributable to health insur­
ance and 0.7 billion EUR (+ 6.7 per cent) to
long-term care insurance. In the first half of
2009, insured persons received nearly 10.9 bil-
lion EUR in insurance benefits, approximately
10.6 billion EUR of which were in health insur­
ance and around 0.3 billion EUR in long-term
care insurance.
The total number of persons with full health
insurance encompassed 8.74 million persons
as of 30 June 2009. In the first half of 2009,
net new business (98 800 persons) was again
much higher than in the previous year (first
half of 2008: 23 400 persons). One major rea-
son for this was the general insurance obliga-
tion in Germany that took force on 1 January
2009. In 2009, thousands of previously unin-
sured persons took out private health and
long-term care insurance. The industry also
greatly intensified its sales efforts in order to
compensate for the negative consequences of
health reform.
The number of supplementary contracts rose
again. Before mid-year, 153 000 new supple-
mentary contracts had been concluded, the
total number of contracts thus increasing
to 21.1 million (30 June 2008: 20.5 million).
Though the increase remained below the
­previous year’s figure of nearly 488 000 new
contracts, this can be attributed to the stren­
uous economic situation. The continued
healthy growth in this area seems to reflect
the public’s persistent response to benefit
cuts in statutory health insurance.
While a results improvement was able to be
achieved for casualty, property and accident
insurance in 2008, the business outlook for
the current year has tangibly clouded over,
once again due to the economic crisis. The
market-wide combined ratio (claims-expense
ratio after settlement) is likely to deteriorate
compared to the previous year by over two
percentage points to 97 per cent. As a result,
actuarial profit in 2009 will decrease sharply
by 1.2 billion EUR to approximately 1.6 billion
EUR.
This trend can be attributed, among other
things, to the fact that for the second year in a
row, only stagnant premium income of + 0.2
per cent to now 54.7 billion EUR can be expect­
ed in financial year 2009. Though decreases in
premium revenue are currently only antici­
pated in motor insurance, the largest contribu­
tor to casualty, property and accident insur­
ance in terms of premium revenue is thereby
affected. Moreover, in nearly all other casualty,
property and accident insurance lines, only a
slight gain in revenue or stagnation at the pre-
vious year’s level is being assumed. Only with
respect to property insurance is a somewhat
stronger rise in premium revenue of 2.1 per
cent anticipated, a gain which is based almost
exclusively on inflation-related contractual
adjustment options.
In addition to the development of premium
revenue, the tangible increase in claims
­expenditures for casualty, property and ac­
cident insurers is a cause for the anticipated
decrease in the actuarial result. The expected
increase in claims expenditures of 1.7 per cent
to around 42.6 billion EUR will thereby mostly
be conditioned by the trends in legal expenses

insurance, marine insurance, and credit, surety­
ship and fidelity insurance. As a result of the
economic crisis, these three lines will have to
withstand much higher claims-related expendi­
tures than in the previous year.
In motor insurance, the trend toward lower
premium revenue is likely to continue in 2009,
thus persisting for the fifth year in a row. After
a decrease in premium income of 2.1 per cent
in 2008, a smaller but nonetheless clear de-
crease of 1.5 per cent to around 20.1 billion
EUR is expected in 2009 based on the semi-
annual figures. All in all, a positive trend in
premium income will not be achieved be-
cause, as in the previous year, the average rate
level is likely to sink again while the number
of contracts is only expected to grow by 1.2
per cent. On the claims side, expenditures
from full and semi-comprehensive cover are
expected to sharply decrease in 2009 by 2.5
per cent to 6.0 billion EUR and by 13.5 per cent
to 1.1 billion EUR, because extraordinarily
high claims were registered in both lines at
the end of the first half of 2008 due to hail
storms. For motor liability insurance, an
extrapo­lation of the long-term trend in claims
seems to indicate a slight increase in claims
expenditures of 0.5 per cent to 12.2 billion
EUR. On the whole, claims expenditures in
motor insurance should amount in 2009 to
approximately 19.3 billion EUR and thus to
1.3 per cent less than in 2008.
2009 YEARBOOK 55
Based on the 2009 semi-annual figures, an
i­ ncrease in gross premium income of 2.1
(2008: 4.0) per cent to 14.9 billion EUR is ex-
pected for property insurance. Particularly
with respect to private property insurance,
adjustment options (compensation for infla­
tion) will probably lead to growth of 3 (2008:
5.0) per cent to 7.8 billion EUR. Accordingly,
growth of 5 (2008: 7.3) per cent is even as­
sumed for residential buildings. For industry/
trade/agriculture, growth of 1 (2008: 2.4) per
cent is predicted, for engineering insurers 2
(2008: 5.7) per cent. Total claims expenditures
for property insurance are expected to remain
at the previous year’s level (10.3 billion EUR).
At 94 per cent, the combined ratio might be
slightly below the previous year’s level (95.4
per cent). For residential buildings, in contrast,
at a combined ratio of 106 per cent a clear
­actuarial loss of 300 million EUR is predicted.
In general liability insurance, premium in-
come is expected to stagnate in 2009 at 6.8
billion EUR. Claims expenditures, in contrast,
should slightly increase by 0.5 (2008: + 3.6)
per cent. The combined ratio will likely remain
at the previous year’s level of 89 per cent. The
number of claims will continue to decrease,
while total claims payments are likely to in­
crease. This indicates a further increase in the
average amount of claims. Individual claims
are thus becoming more expensive.
56 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
For 2009, accident insurers anticipate a con­
tinuation of the development observed in
­recent years: It is expected that growth in
gross premium income will be low with a
slight decrease in the number of contracts
and a slight worsening of claim events. By
­year-end 2009, premiums are expected to in-
crease by merely 1 (2008: 0.7) per cent, with
revenue amounting to 6.4 billion EUR. The
number of contracts is predicted to decrease
by 1 (2008: 1.7) per cent to 28.1 million con-
tracts, while expenses for claims within the
­financial year will increase by 3.0 (2008: 1.5)
per cent to 2.9 billion EUR. The loss ratio for
the year will thus increase to 58 per cent,
while the combined ratio is predicted at 82
(2008: 77.4) per cent.
In legal expenses insurance, premium income
is expected to stagnate at 3.2 billion EUR in
2009. A slight impetus for growth can be
­expected from the contractual premium ad-
justment option existing as of October. The
number of contracts is also likely to stagnate
at the 2008 level (20.6 million contracts).
Claim events in 2009 will largely be influenced
by the effects of the economic crisis on the
­labour market. Already in the first half of
2009, legal expenses insurers had to process
15 per cent more cases involving labour rights
protection than in the same period of last
year. Payments even increased by 20 per cent.
It can be assumed that this trend will also
continue in the second half, so that expendi­
tures for claims during the financial year can
be extrapolated at 2.5 billion EUR (+ 9 per cent)
for 2009.
Extrapolated figures for 2009 indicate that
premium income for marine insurance will
stagnate at a volume of 1.4 billion EUR. On the
claims side, based on an assessment of the
first half of 2009, results are worse than in the
previous year by about 5 percentage points.
Significant competition is apparent in this
line, despite the weak economic situation, as
is a high degree of claims sensitivity among
customers as a result of the crisis. As a whole,
the loss ratio should amount to 81 per cent
and the combined ratio to 102 per cent.
The economic environment of credit insur­
ance in Germany has been strongly impacted
by the financial and economic crisis and the
related increase in insolvency risk. After the
number of business insolvencies in 2008 only
increased slightly by 0.6 per cent to 29 291 in-
solvencies as a result of the relatively good
first half, a sharp rise of around 20 per cent to
35 000 insolvencies is anticipated for 2009.
For financial year 2009, a stagnation in gross
premium income is currently expected in cred­
it, suretyship and fidelity insurance at around
1.4 billion EUR, with an increase in claims ex-
penditures of approximately 50 per cent to
around 1.5 billion EUR, resulting in a loss ratio
of 106 per cent. These figures document that
the financial and economic crisis is having a
significant impact on the actuarial results of
the line.
 2009 YEARBOOK 57

Investments and capital markets Capital market data

Year flat yield of yield of the German bond German share
Insurance companies count among Germany’s fixed-interest 10-years index (REX) index (DAX)
securities*) government
largest institutional investors. They are normal­ as % loan*) as %
ly long-term oriented investors. In order to 1997 5.1 5.7 111.0 4 249.7
­ensure that they can meet the commitments 1998 4.4 4.6 118.2 5 002.4
arising out of insurance contracts at all times, 1999 4.3 4.5 110.6 6 958.1
2000 5.2 5.3 112.5 6 433.6
the Federal Government and supervisory
2001 4.7 4.8 113.1 5 160.1
­authorities have imposed a series of qualitative 2002 4.6 4.8 117.6 2 892.6
and quantitative regulations for the practical 2003 3.8 4.1 117.4 3 965.2
implementation of capital investment policy. 2004 3.8 4.1 120.2 4 256.1
2005 3.2 3.4 120.9 5 408.3
Investment principles and objectives 2006 3.7 3.8 116.8 6 596.9
2007 4.2 4.2 114.8 8 067.3
Investments by the insurance industry are sub-
2008 4.0 4.0 121.7 4 810.2
ject to five general investment principles (se­
  2009**) 3.1 3.3 122.7 5 675.2
curity, profitability, liquidity, mixture and diver-
*) yield figures are average annual figures calculated on a daily basis. **) as of September 30th 2009 –
sification), qualitative investment categories, Source: Bloomberg.
and quantitative limits on investments. The In-
vestment Ordinance expressly prescribes that
Current income from investments1)
compliance with general and special invest-
2000 2005 2006 2007 2008*)
ment principles must be assured through well-
EUR bn EUR bn EUR bn EUR bn EUR bn
qualified asset management, suitable internal
Life assurance 36.2 27.8 29.7 32.5 31.8
investment principles, controlling procedures Health insurance 4.8 5.2 5.8 6.6 6.6
and tactical investment policy. Insurance com- Casualty, property
panies have used risk management systems and accident insurance 6.5 6.3 5.5 7.6 6.1
for a long time to control their investments and Total for direct insurers 47.6 39.3 41.0 46.6 44.5
Reinsurers2) 8.0 7.7 11.0 11.8 0.9
adjust their portfolio structures to their indi­
*) preliminary figures for 2008, 1) from 1994 in accordance with new accounting standards, 2) financial
vidual risk-bearing capacities. The above stand­ year deviates from the calendar year – Source: Federal Financial Supervisory Authority, GDV.
ards have proven themselves during the crisis
on the financial markets.
n Long-term-oriented investment policy em-
Insurance companies conduct professional as- ploying consistent asset liability manage-
set management, which particularly involves ment (risk model for asset liability manage-
pursuing the following objectives: ment on balance sheets).
n Timely provision of capital to allow fulfil-
ment of obligations to policyholders at all
times.
n Achieving the highest returns possible with
the greatest possible security.
58 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Investment portfolio by type of investment*)

Balance sheet values
Type of investment 2004 2005 2006 2007 2008**)
EUR share EUR share EUR share EUR share EUR share
bn as % bn as % bn as % bn as % bn as %
Land and immovable property rights 20.6 2.0 21.2 2.0 19.9 1.8 17.4 1.5 16.6 1.4
Investments in affiliated undertakings and
participating interests:
shares in affiliates 113.7 11.3 121.6 11.4 124.6 11.3 133.1 11.6 128.5 11.1
loans to affiliates 19.0 1.9 16.0 1.5 13.2 1.2 17.5 1.5 21.0 1.8
participating interests 13.1 1.3 9.5 0.9 11.3 1.0 11.4 1.0 12.1 1.0
loans to undertakings linked by virtue of a
participating interest 5.3 0.5 3.3 0.3 3.2 0.3 1.1 0.1 1.4 0.1
Other investments:
shares 15.4 1.5 20.0 1.9 22.4 2.0 21.3 1.9 9.4 0.8
shares in pooled investments 205.5 20.4 228.2 21.4 235.8 21.4 243.2 21.3 260.5 22.5
other variable-yield securities 4.3 0.4 4.2 0.4 4.0 0.4 3.4 0.3 2.6 0.2
bearer bonds and other fixed-income
securities 104.0 10.3 116.9 11.0 113.9 10.3 113.0 9.9 116.2 10.0
loans guaranteed by mortgages
and other loans 69.1 6.8 67.5 6.3 66.5 6.0 65.0 5.7 63.7 5.5
registered bonds 208.7 20.7 219.0 20.5 235.7 21.4 253.0 22.1 257.9 22.2
debentures and loans 194.7 19.3 207.9 19.5 217.8 19.8 229.2 20.1 231.8 20.0
policy loans 5.7 0.6 5.4 0.5 5.2 0.5 5.1 0.4 5.5 0.5
other loans 9.8 1.0 10.1 0.9 10.7 1.0 10.8 0.9 9.7 0.8
deposits with credit institutions 18.1 1.8 13.1 1.2 13.5 1.2 14.6 1.3 18.4 1.6
Other investments 2.6 0.3 2.8 0.3 3.5 0.3 3.7 0.3 4.5 0.4
Total 1 009.4 100.0 1 066.6 100.0 1 101.4 100.0 1 142.8 100.0 1 159.8 100.0
*) spread of investments for life, health, casualty, property and accident and reinsurance classes – Source: GDV, Federal Financial Supervisory Authority. **) Figures for 2008
are preliminary.

Modification of Investment Ordinance ­ pportunities in the Investment Act previous-

in 2010
As one of the consequences of the crisis on
the financial markets, the ongoing modifica-
tion of the Investment Ordinance was initially
suspended this year. With the modification of
the Investment Ordinance planned for next
year, the Federal Government and supervisory
authorities are essentially pursuing three
goals:
Firstly, through the implementation of the
­Investment Ordinance, insurance companies
are to be given the expanded investment
o
ly adopted at the end of 2007, including spe-
cial funds and public-private-partnership
funds and the elimination of the so-called
“three-property-limit” in real estate compa-
nies. Secondly, supervisory authorities plan
changes related to the altered needs of mar-
ket participants, including an increase in the
mixture rate and an adjustment of the diver­
sification benchmark, which should expand
investment options related to shareholdings.
Finally, BaFin will make the changes that are
necessary in its view as a consequence of the
 2009 YEARBOOK 59

Investment portfolio by insurance class*)

Balance sheet values
2004 2005 2006 2007 2008
EUR share EUR share EUR share EUR share EUR share
bn as % bn as % bn as % bn as % bn as %
Life assurance 625.3 61.9 647.6 60.7 665.5 59.8 682.1 59.7 686.1 59.2
Health insurance 108.1 10.7 119.2 11.2 130.5 11.7 142.4 12.5 151.6 13.1
Casualty, property
and accident insurance 116.8 11.6 123.5 11.6 131.0 11.8 139.1 12.2 135.8 11.7
Reinsurance 159.2 15.8 176.3 16.5 174.3 16.7 179.2 15.7 186.2 16.1
Total 1 009.4 100.0 1 066.6 100.0 1 101.4 100.0 1 142.8 100.0 1 159.8 100.0
*) spread of investments for life, health, casualty, property and accident and reinsurance classes – Source: Federal Financial Supervisory Authority.

crisis on the financial markets, including
­changes in the scope and allocation of assets
at credit institutes. In principle, a diversification
rate of 5 per cent exists in accordance with the
Investment Ordinance; however, for federal
state banks and banks belonging to the Deposit
Assurance Fund, a diversification rate of 30 per
cent applies. The crisis on the financial markets
has made it clear that the increased diversifi-
cation rate for bank investment commitments
cannot be justified. The supervisory author­
ities will therefore bring about a sharp reduc-
tion in the diversification rate. Subordinated
loans, profit participation rights and sharehold­
ings in credit institutes will in the future also
be credited towards the sharehold­ing quota.
Portfolio, gross new acquisition and
structure of investments
At the end of 2008, the investment portfolio
of the insurance industry (not including pen-
sion and funeral expenses funds) amounted
to approximately 1 160 billion EUR. This corre-
sponds to potential growth of approximately
1.5 per cent over the previous year. Because
the portfolio of the insurance industry amount­
ed to approximately 300 million EUR in 1990,
the portfolio volume has multiplied many
times within the last 18 years.
The gross new investment volume of the insur­
ance industry can be estimated at approxi-
mately 402 billion EUR in 2008. Around one
quarter thereof (101 billion EUR) was attribut­
able to bearer bonds and other fixed-interest
securities. A further 17.9 per cent (71.9 billion
EUR) were invested in registered bonds and
loans. New investment in investment shares
amounted to 48 billion EUR, while new real
estate credits (mortgage, land charge and an-
nuity charge claims) amounted to 5.7 billion
EUR. New investments of 2 billion EUR were
made in real property.
Registered bonds, notes receivable and loans
make up another strength of insurers’ port­
folios. At the end of 2008, they accounted for
approximately 505 billion EUR, corresponding
to a share of 43.5 per cent of the total invest-
ment portfolio.
Equities
In principle, equities represent a major com-
ponent of the investment policies of insur­
ance companies, as attractive yields can be
60 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
achieved with them over the long term. In
light of the very negative price trends in 2008,
the industry-wide equities quota was lowered
to 4.5 per cent. The majority of these invest-
ments were hedged through corresponding
measures, so that the potential risk can be
qualified as relatively low.
Real estate investments
In view of their constantly decreasing share in
the total investment portfolio, the investment
category “land and leasehold rights” has be-
come less important in recent years. At the
end of 2008, the book value of the directly
held real estate portfolio was 16.6 billion EUR,
corresponding to a relative share of 1.4 per
cent. The picture changes, however, when in-
direct real estate investments are considered,
which are growing in importance. With due
regard to the indirect investment volume, the
Alternative investments as part of overall investments
by direct insurers (2008)
Investments
(ex alternatives)
97.1%
ABS/CLN*
Alternative 1.5%
Investments
3.4%
Private Equity
0.6%
Hedge Funds
0.5%
* all securities secured by accounts
receivable (e.g. by mortgages or
receivables from credit cards)
Figures partly rounded
Source: GDV, Federal Financial Supervisory Authority
real estate quota is between 4 and 5 per cent.
Through indirect investments, the real estate
portfolio is being diversified internationally.
Alternative investments
The commitment of German direct insurers in
alternative investments must be character­
ised as relatively manageable and has been
reduced even more in the course of the crisis
on the financial markets. At year-end 2008,
approximately 0.8 per cent of the total invest-
ment portfolio was attributable to so-called
“high-yield bonds”, a further 1.5 per cent was
invested in directly and indirectly held ABS/
CLNs, while the share in hedge funds and pri-
vate equity can be specified at 0.5 per cent
and approximately 0.6 per cent respectively.
Stress tests
Stress tests are an accounting instrument
used by insurers for purposes of risk manage-
ment. The effects of adverse capital market
scenarios on the ability of insurers to bear
risks are projected. The corresponding calcula-
tions must be presented to the supervisory
authorities once a year. Based on the insurer’s
balance sheet at the end of the year, the test
projects the development of assets and liabil­
ities until the end of the following year in order
to determine whether the insurer has an ad­
equate risk buffer to withstand four defined
shock scenarios. The scenarios include credit
risks as well as market alteration risks arising
in stock, bond and real estate investments.
High Yield
0.8%
The scenario R 10 tests what would happen if
bonds lost 10 per cent of their value. The three
further stress scenarios considering equity in-

vestments of insurers were modified as of
­year-end 2008. As of this year, the calculations
of the traditional equity stress scenario (A 35)
and the combined scenarios RA 25 and AI 30
are to be carried out in standardised form. The
capital necessary to meet solvency require-
ments and to make investments in equities is
oriented on the level of the EURStoxx 50 Index
at year-end. This means that the capital require­
ment for equity investments according to regu­
latory law increases in the case of positive
­price developments and decreases in the case
of negative ones. In this way, pro-cyclical action
by businesses can be countered. In light of the
year-end level of the EURStoxx 50 in 2008
(2 447.62 points), scenario A 35 resulted in a
stress factor of 16 per cent. The combined
scenarios revealed an equities stress level of
12 per cent.
An insurance company is said to have passed
the stress test if, after simulation of the shock
scenarios, sufficient capital investments in-
cluding their valuation reserves are still avail­
able in order to meet its obligations towards
policyholders and also to meet solvency
require­ments according to regulatory law. As
in past years, German insurance companies,
bar a few exceptions, came up with positive
stress test results. A negative stress test result
does not mean that an insurance company
will not be able to meet its obligations.
Instead, negative stress test results should be
understood as a call to take further action in
order to increase the capacity to tolerate risk.
2009 YEARBOOK 61
Outlook
Compared to other financial service providers,
life assurers have made it through the crisis
well. However, the net return on investments
in 2008 was low (3.55 per cent) due to the dra-
matic downturn on the equities market and
the loss or drop in valuations of fixed-interest
securities. The challenge for life assurers is to
achieve sustained surpluses despite low inter­
est rates and a diminished capacity to bear
risk.
While the development of interest rates for
mortgage bonds and corporate bonds offered
attractive purchase options at the start of
2009, the gap between these securities and
risk-free returns (federal government bonds)
has meanwhile been greatly reduced. Never-
theless, a higher net return on investments
can be expected in 2009 than was the case
last year. The long-term ability to meet obliga-
tions to insurance companies remains as­
sured in all cases.
To be implemented prior to autumn 2012, the
EU Solvency II Framework Directive provides
for broad investment leeway. The supervisory
system will switch from a quantitative to a
qualitative approach: The more risks an insur­
ance company takes on, the higher will be the
equity backing it. Therefore, investment policy
in the future will be bound by the capacity of
businesses to tolerate risk and not by quanti-
tative restrictions.
62 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
It is obvious that the application of the Invest-
ment Ordinance helped businesses to make it
through the crisis on the financial market in a
stable fashion. The guiding principle of the In-
vestment Ordinance is to test the elasticity of
an investment portfolio against specific capi-
tal market scenarios and to assure the ability
to react adequately at all times to changes on
the financial and real estate markets or to
other uncommon market situations.
Though the working group of European super­
visory authorities, CEIOPS, has confirmed the
application of qualitative supervision in the
implementation of the Solvency II Directive, it
remains an open question whether European
politicians and supervisory authorities will
completely retreat to principle-based super­
vision of investment activity after the ex­
perience of the financial market crisis. The
­discussion with the Federal Government and
­supervisory authorities on the assessment of
future market risks has begun.
The insurance industry as part
of the overall economy
As a risk bearer for companies and households
alike, the insurance industry plays a role as
part of the overall economy. By the same
­token, the general economic environment
­determines the basic conditions for the mar-
ket opportunities and course of business in
the insurance industry. For this reason, the
current business trend of the sector must
­always be viewed against the backdrop of the
general economic trend:
n While the sharp decline in growth expe­ri­
enced in 2009 will not persist in the years
to come, a real economic recovery has failed
to materialise. Instead, only slight real
growth can currently be expected for 2010,
hardly signifying more than a stabilisation
in relation to 2009. The loss compared to
2008 will not be made up. The outlook is
also encumbered with great insecurity. The
dynamic growth currently being registered
in the global economic environment and
world trade could quickly subside again.
n In light of the crisis, the performance of
Germany’s job market can indeed be consid­
ered as robust to date. In addition to the
newly obtained flexibility on the labour
market (e.g. through the use of working
time accounts), the massive expansion of
short-time work regulations has contribut-
ed to this more than anything else. The
structural labour market reforms resulting
from Agenda 2010 created a favourable
­starting situation before the crisis. The
­state and development of the job market
will have a decisive impact on economic de-
velopment in 2010. While only a relatively
moderate increase in the unemployment
rate is currently being assumed, a sharp de-
cline on the job market would put a great
strain on economic growth. The effects of
the economic and banking crisis would
then take their first toll on private house­
holds
n After 2009, prices should continue to de­
velop very moderately in 2010. The brief
episodes of negative inflation rates this
year are not likely to repeat in 2010; yet the
under-utilisation of production and mod­
erate price increases primarily in petroleum
and energy are likely to slow down price
­dynamics.
 2009 YEARBOOK 63

Household insurance protection 2008 | 2009

Figures in per cent of a representative Total of Germany

sample of those surveyed on the West
existence of individual insurances in
East
the household

Private health insurance only 12.2

13.7
6.0

Private annuity insurance 25.6

26.4
22.1

Occupational disability and 24.1

24.2
total disability insurance
23.5

Motor vehicle 36.1

36.0
full comprehensive cover
36.3

Private accident insurance 40.6

39.2
46.3

Legal expenses insurance 41.9

43.2
36.4

Life assurance 35.6

36.9
(not including funeral expenses)
30.2

Private liability insurance 70.8

70.8
71.1

Comprehensive insurance 77.1

75.6
on contents
83.3
Source: Allensbach 2009 advertiser analysis –
Basis: Federal Republic of Germany,
population 14 years and up
0 10 20 30 40 50 60 70 80 90 100
© GDV-Jahrbuch 2009
64 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
n All in all, the economic perspectives for Ger-
many are associated with significant risks.
In addition to the danger of an increase in
business insolvencies and further setbacks
in the banking sector (in part conditioned
by these insolvencies) – whether due to still
unsolved problems on balance sheets or an
imminent rise in credit defaults – renewed
global economic setbacks cannot be ruled
out.
Even apart from the effects of the current
­financial and economic crisis, the German in-
surance industry continues to face great chal-
lenges. For some time now, it has registered a
sharp slowdown in premium growth. The dy-
namic impetus of market processes due to
technological advances and the process of
globalisation involve an unmistakable inten­
sification of competition within the industry.
Changes in political and regulatory conditions
will also require considerable adjustments by
German insurers. On the demand side, in turn,
the increasing differentiation of customer
groups and demographic change in particular
create new tasks for insurance companies.
As a result, insurance markets in Germany
have currently begun moving far stronger
than in previous years or decades. Apart from
the dramatic changes in the array of products
and distinct changes in the relative position of
the individual providers, this can also be seen
in the pluralisation of sales structures and the
progressive rationalisation of internal busi-
ness processes.
In light of these long-term trends, even if the
general economic environment were again
more hospitable, low growth in business
­volume, if not further stagnation or even a
­decline in premium revenue can by no means
be ruled out. From a medium-term perspec­
tive, many fundamental factors do actually
speak for the German insurance industry’s
sustained growth potential. Firstly, the essen-
tial macroeconomic function of the insurance
industry in covering diverse risks constitutes a
lasting and stable basis for the demand for in-
surance services. At the same time, changes in
the economy and society (such as the increas­
ing number of older people) bring with them
considerable growth potential, for example in
the area of services (assistance) that comple-
ment term coverage. Furthermore, a new de­
finition of the roles that the state and the pri-
vate insurance industry play in the area of so-
cial security also brings with it considerable
growth potential.
 2009 YEARBOOK 65

Level of private provision
in Germany
While the insurance industry almost always
had a lead in growth over the economy as a
whole in the past, its room for growth has
­recently narrowed considerably. The relation
between premium revenue and gross do­
mestic product, known as “insurance pene­tra­
tion”, decreased again slightly in 2008.
­Nevertheless, at the current 6.6 per cent
(2008), insurance penetration in Germany is
still clearly above the figures of previous de­
cades. At the start of the 60s, premium re­v­
enue made up only 3 per cent of the gross
­domestic product.
However, Germany’s insurance penetration
continues to be merely average compared to
other countries. In the United Kingdom, the
Netherlands and Switzerland, the insurance
pene­tra­tion rate in 2008 was 10 per cent or
more, in France, Japan and the USA just slight-
ly below. The higher insurance penetration in
other countries is due in part to the much
­greater role played by life assurance in those
countries for retirement planning and as a
component of capital accumulation.
land) as well as the USA and Japan, the insur­
ance ­density is higher than in Germany, reflect­
ing the lesser role played in those countries by
state-run social security systems.
As in other industrialised countries, Germany’s
insurance penetration and density seem to be
trending upwards, if only due to the increas­
ing role of private assurance in light of demo­
graphic changes. Moreover, in view of the cur-
rent economic and social challenges, more
and more individuals and businesses are
increasing­ly conscious of how important it is
to obtain adequate coverage of risks, includ­
ing investment risks. Yet the current macro­
economic development establishes tangible
limits to an expansion of demand for insur­
ance as a result of the narrow financial manoeu­
vring room of households and businesses.

With respect to “insurance density” as well, i.e.

the total insurance premiums per resident,
Germany does not rank very highly on an
inter­national scale, its residents spending an
average of just 2 000 EUR on insurance each
year, including business-related insurance. In
many other European states (such as the
­United Kingdom, the Netherlands and Switzer­
66 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Insurance in the national economy In Germany, however, provision is still taken

Domestic insurance premiums per inhabitant and as a proportion of gross care of mainly via public systems and less by
national product; from 1991 including the new Federal States action under the responsibility of private in­
Year density of insurance dividuals. Contributions paid to various social
insurance penetration
security branches alone are still almost three
EUR1) as %2)
times higher than premium revenue in private
1980 584 4.57
1991 989 5.61
insurance. In addition, social security benefits
1997 1 445 6.19 are funded to a considerable extent by general
1998 1 471 6.14 tax revenue.
1999 1 550 6.33
2000 1 597 6.37 The total burden of social security contri­
2001 1 639 6.39 butions paid by employees and employers
2002 1 708 6.58
­together within the scope of employment
2003 1 790 6.83
2004 1 844 6.88
relation­ships that are subject to social security
2005 1 916 7.04 contributions amounted in 2009, despite a
2006 1 967 6.98 slight decrease, to nearly 40 per cent of gross
2007 1 982 6.72 wages (statutory pension insurance: 19.9 per
20083) 2 001 6.60 cent, statutory health insurance: 14.0 per cent
1) gross premiums written by direct insurers in proportion to inhabitants, 2) gross premiums written by [in the second half of the year] with a special
direct insurers in proportion to gross domestic product, 3) preliminary figures – Source: GDV.
employee contribution of 0.9 per cent, sta­tu­
tory long-term care insurance: 1.95 per cent,
unemployment insurance: 2.8 per cent).
Private cover and social security ­Maximum contributions to the various forms
of social security totalled almost 1 850 EUR
In the social free-market economy, the task of per month in the original Federal States. Thus,
assuring people against basic risks of life is there continues to be a grave discrepancy
­organised partially through state institutions ­between employers’ and employees’ (net)
and partially based on choices made by indi­ ­wages, which ultimately diminishes employee
vidual customers within the framework of pri- motivation and the incentive to perform. Pre-
vate insurance. In past years, repeated reforms cisely with respect to lower and middle in-
have been made concerning social security. come levels, social security contributions are
Thus, for example, security in the case of significantly straining the situation on the
­unemployment was reformed through the ­labour market; new forms of employment
Hartz IV legislation. The Riester reforms led to and gainful activity as well as the granting of
a new distribution between statutory pension state benefits to increase (net) wages can only
schemes and providers of private and com­ partially offset this pressure, at great expense.
pany old-age pension schemes.

The fact that further reforms are needed can
also be seen on the expenditures and benefits
side. Total social security expenditures make
up approximately 30 per cent of gross domes­
tic product, even if a rather narrow definition
of social security benefits is taken as a basis.
By contrast, benefits provided by private insur­
ance (amounts paid out to customers, pro­
visions for current as well as future claims,
­bonus and rebate provisions) only account for
slightly over 6.5 per cent of gross domestic
product.
Through the reforms in recent years, clear pro-
gress was achieved in readying some branches
of social security insurance for the future. In
light of demographic change, the challenges
of globalisation and the financial and eco­
nomic crisis and the difficult financial situa­
tion of public budgets in the long run, further
efforts are still required to make social secu­
rity in Germany fit for the future. The state will
increasingly concentrate on its core functions.
Individuals will have to – but also be able to –
assume more responsibility. Offers by the pri-
vate insurance industry, which today already
forms an integral part of the social security
system in Germany, will be able to comple-
ment the public social security systems in
many areas. A high degree of social security
on which the public rightly relies can thus
continue to be warranted.
A distribution of tasks between the public and
private markets in social security will ensure
sustained financing and justice to the genera-
tions, and will strengthen the basic principles
of a liberal society, according to which deci­
sions taken by private individuals under their
own responsibility are always preferred to
2009 YEARBOOK 67
­ ublic solutions. Furthermore, the respective
p
strengths of public and private social security
systems can then ideally complement each
other. As a result, the goals of social security
can be pursued in a way that keeps the costs
and burdens for industry and society as low as
possible.
Capital accumulation
of private households
Private insurance is also of considerable im-
portance for the capital accumulation of pri-
vate households. Particularly in the case of life
assurance, independent risk prevention goes
hand in hand with the process of capital accu-
mulation and investment.
In 2008, the acquired assets of private
households amounted to 120 billion EUR,
­according to calculations by the Bundesbank,
Germany’s central bank. This was almost 4 bil-
lion EUR more than in 2007. Investments by
private households in insurance (life assur­
ance, casualty, property and accident insur­
ance and private health insurance, including
Pensionskassen and funeral expenses funds,
pension funds and professional and supple-
mentary pension funds) amounted to 39 bil­
lion EUR. Asset accumulation in 2008 as a
whole, but above all in the last four months of
the year, was dominated by money invest-
ments with banks. As the financial crisis
­worsened, but particularly after the Federal
68 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Formation of monetary wealth of private households by type of investment Government guaranteed the bank deposits of
over the year private households, there was a massive shift
in EUR bn of assets away from securities investments in
2003 2004 2005 2006 2007 2008 equities, investment funds and certificates to
Formation of monetary wealth 143 135 139 134 116 120 the banking sector. In contrast, asset accumu-
of which:
lation with life assurers remained stable.
in banks1) 58 49 42 42 86 121
sight deposits2) 65 44 49 20 38 46
time deposits – 18 –6 –1 32 57 77 As a whole, the nominal value of private
savings deposits 15 12 –1 – 16 – 30 – 20 household assets at the end of 2008 was 4.4
savings certificates –4 –2 –5 7 21 17 trillion EUR. Despite the positive asset accu-
in investment funds 28 –5 18 –7 25 6 mulation, this figure was around 140 billion
in insurances3) 45 50 55 61 65 39 EUR lower than at the end of 2007. Similar to
of which:
2002, high valuation losses with respect to
life assurances 20 23 26 25 23 –3
­direct and indirect investments in equities
health insurances 9 10 11 11 12 19
pension institutions4) 14 15 16 24 29 22 were the cause of this. Nearly 40 per cent of
in securities 2 31 17 26 – 64 – 51 total private household assets were kept in
bonds5) 19 34 18 28 – 50 –8 banks at the end of 2008, nearly 30 per cent
shares – 20 –7 –4 –5 – 17 – 46 with insurers, over 16 per cent in life assur­
other equity 3 3 3 3 3 3 ance alone. In 1980, the share of life assur­
pension commitments 10 9 7 10 4 6
ance in the financial assets of private
share as % households was just 10 per cent. There are
2003 2004 2005 2006 2007 2008
many indications that the significance of life
Formation of monetary wealth 100.0 100.0 100.0 100.0 100.0 100.0
of which:
assurance as a component of capital accumu-
in banks1) 40.5 36.4 30.6 31.7 73.8 100.6 lation of private households will continue to
sight deposits2) 45.6 32.9 35.1 14.6 32.7 38.5 increase noticeably in the future. Life assur­
time deposits – 12.3 – 4.4 – 0.5 23.8 49.1 64.4 ance has been strengthened by the financial
savings deposits 10.3 9.1 – 0.7 – 12.0 – 25.7 – 16.6 and economic crisis. But even without the cri-
savings certificates – 3.1 – 1.3 – 3.3 5.2 17.7 14.3 sis, life assurance plays a key role among the
in investment funds 19.3 – 3.6 12.8 – 4.9 21.3 4.7
potential capital accumulation instruments
in insurances3) 31.4 37.2 39.3 45.8 56.2 32.1
of which:
for old-age provision due to its specific
life assurances 14.1 17.1 18.5 18.7 19.8 – 2.5 character­istics: additional coverage of bio­
health insurances 6.0 7.3 7.6 8.2 10.3 15.8 metric risks, its long-term focus and the provi-
pension institutions4) 10.0 10.9 11.2 17.9 24.9 18.3 sion of guarantees in conjunction with an at-
in securities 1.7 23.0 12.1 19.7 – 55.0 – 42.0 tractive return.
bonds5) 13.5 25.6 12.8 21.2 – 43.3 – 6.7
shares – 14.0 – 4.8 – 2.9 – 3.7 – 14.2 – 37.9
other equity 2.2 2.4 2.2 2.2 2.5 2.5
pension commitments 7.1 6.9 5.3 7.7 3.7 4.8
1) foreign and domestic, 2) including cash value, 3) life assurance, including Pensionskassen, funeral
expenses and pension funds, occupational and supplementary pension funds, casualty, property and
accident insurance and health insurance, as well as other claims (including interest-bearing profit shares
and other accounts payable towards policyholders), 4) Pensionskassen, funeral expenses funds and
p
­ ension funds, occupational and supplementary pension funds, 5) including money market securities –
Source: Deutsche Bundesbank.
 2009 YEARBOOK 69

The gross financial assets of private house­ Monetary wealth of private households by type of investment
holds were juxtaposed by debt of over 1.5 tril- as per end of year
lion EUR at the end of 2008. Net financial as- in EUR bn
sets thus amounted to 2.9 trillion EUR at year- 1995 2000 2005 2006 2007 2008
end. This does not include private household Total financial assets 2 564 3 516 4 203 4 392 4 552 4 413
of which:
property assets (primarily in the form of real
in banks1) 1 128 1 235 1 499 1 541 1 627 1 743
estate).
short-term 782 921 1 211 1 228 1 282 1 386
long-term 346 314 288 313 345 358
In 2009, despite the severe recession, a similar in investment funds 190 409 515 515 546 497
amount of private household funds will be in insurances2) 573 866 1 099 1 159 1 224 1 263
available for capital accumulation as in 2008. short-term 52 65 78 80 81 81
The disposable income of private households long-term 521 801 1 021 1 080 1 144 1 182
life assurances 374 553 671 695 718 715
and the rate of savings were unchanged com-
health insurances ° 68 112 123 135 154
pared to 2008. Provided there are no serious
pension institutions3) ° 179 238 262 291 313
valuation-related reductions before the end of in securities 512 813 850 925 900 649
the year, capital accumulation in 2009 could bonds4) 219 227 322 375 353 304
thus sharply increase again, in contrast to the shares 191 453 327 349 375 166
previous year. The distinctly lower interest other equity 102 133 201 201 172 178
rate on bank deposits and further low returns pension commitments 161 193 241 251 255 261

on the capital markets have set the key para- share as %

meters for the distribution of funds ear- 1995 2000 2005 2006 2007 2008
Total financial assets 100.0 100.0 100.0 100.0 100.0 100.0
marked for capital accumulation among the
of which:
various types of investment. Compared to the in banks1) 44.0 35.1 35.7 35.1 35.7 39.5
end of 2008, the structure of financial invest- short-term 30.5 26.2 28.8 28.0 28.2 31.4
ments have normalised again over the course long-term 13.5 8.9 6.9 7.1 7.6 8.1
of the year to date. Capital accumulation with in investment funds 7.4 11.6 12.3 11.7 12.0 11.3
insurers has additionally profited in 2009 in insurances2) 22.3 24.6 26.1 26.4 26.9 28.6
from the great attraction of life assurance as short-term 2.0 1.8 1.9 1.8 1.8 1.8
long-term 20.3 22.8 24.3 24.6 25.1 26.8
an investment, above all in the segment of
life assurances 14.6 15.7 16.0 15.8 15.8 16.2
single premiums. For their part, insurers are health insurances ° 1.9 2.7 2.8 3.0 3.5
still making the funds they accumulate avail­ pension institutions3) ° 5.1 5.7 6.0 6.4 7.1
able for investment in jobs, housing and infra- in securities 20.0 23.1 20.2 21.1 19.8 14.7
structure. bonds4) 8.5 6.5 7.7 8.5 7.8 6.9
shares 7.4 12.9 7.8 7.9 8.2 3.8
other equity 4.0 3.8 4.8 4.6 3.8 4.0
pension commitments 6.3 5.5 5.7 5.7 5.6 5.9
1) foreign and domestic, 2) life assurance, including Pensionskassen, funeral expenses and pension
funds, occupational and supplementary pension funds, casualty, property and accident insurance and
health insurance, as well as other claims (including interest-bearing profit shares in insurances and
other accounts payable towards policyholders), 3) Pensionskassen, funeral expenses funds and pension
funds, occupational and supplementary pension funds, 4) including money market securities – Source:
Deutsche Bundesbank.
70 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Insurance and businesses
As a consequence of technological progress,
as well as political, economic and social
­changes, businesses are confronted with ever
greater risks, even more so than individuals.
However, the ability to deal with new risks is a
prerequisite for entrepreneurial activity. The
greater a company’s risk exposure, the greater
its risk reduction requirement. Adequate
insur­ance cover plays a key role in meeting
this requirement.
Because insurance cover enables businesses
to assume entrepreneurial risks in the first
place, the insurance industry contributes in
no small part to increasing economic per­
formance. Individual companies would
quickly reach the limits of their capacity to
bear risks alone. With insurance cover, these
limits are pushed further out, thus freeing up
entrepreneurial potential.
For their part, insurers are constantly en­
deavouring to develop new coverage concepts
for businesses to meet the needs of their cus-
tomers. In addition to improved risk models
and refined calculation techniques, this in­
cludes utilisation of the whole range of state-
of-the-art risk management methods. How­
ever, in order to ensure that as many risks as
pos­sible can be insured, insurers and busi­
nesses must be able to structure insurance
contracts flexibly and in line with their needs.
This is the only way to extend the limits of
­insurability through intensive use of risk
­management tools. On the other hand, regu­
latory inter­ference by the state, e.g. in the
form of new compulsory insurance schemes,
may be counter-productive when it comes to
insuring business risks.
Competition and consolidation
in the insurance industry

Increasingly dynamic markets, diminished

room for growth and increasing pressure on
Number of insurance companies*) by class of business profit margins have caused many insurers to
End Number of insurance companies under federal supervision1) total of redefine their positioning in the market.
of year total life Pensions-­ health casualty, re­ insurance Addition­ally, technical progress (e.g. in IT and
number assurance kassen insurance property insurance compa- communications technologies) often leads to
of com­ com­ & com­ nies
com­ panies panies accident panies under an altered assessment of ideal company size.
panies insurance federal
and state The number of corporate takeovers, mergers
com­
panies super­ and, above all, cooperation agreements for
vision2)
1990 729 109 153 55 322 28 2 659
the provision of insurance services has thus
1995 677 121 141 58 268 32 2 157 increased significantly in recent years. The
2000 659 119 140 55 254 41 1 882 German insurance industry is thus in a state
2001 640 116 134 55 249 40 1 825 of change unseen for many years.
2002 645 110 154 55 238 43 1 779
2003 640 106 157 54 235 45 1 716
2004 633 105 158 54 231 44 1 669
2005 632 104 160 53 227 47 1 638
2006 613 100 153 52 222 45 1 592
2007 609 100 152 51 224 41 1 544
2008 607   99 153 51 222 41 °
*) insurance companies under federal supervision, 1) with new business, 2) including insurance com­
panies without new business – Source: Federal Financial Supervisory Authority.
 2009 YEARBOOK 71

Insurance portfolios at year-end

Year1) 1980 1990 1995 2000 2005 2007 20082) 2008/2007
Number in millions as %
Life assurance3) 65.8 72.4 81.1 87.6 96.9 97.2 96.3 – 0.9
Private health insurance4) 24.1 32.7 52.0 47.8 53.7 60.3 62.0 2.8
Casualty, property
and accident insurance5) 157.8 200.3 242.8 262.1 274.7 284.0 285.7 0.6
thereof
motor insurance6) 61.9 75.5 92.1 97.2 99.1 100.9 101.9 1.0
property insurance classes7) 47.7 57.8 66.2 67.4 67.4 67.8 67.9 0.1
general liability insurance 21.9 28.0 35.0 37.8 41.8 42.8 43.5 1.6
private accident insurance7) 14.8 21.5 28.2 29.1 29.2 28.8 28.4 – 1.4
legal expenses insurance8) 11.0 15.3 18.7 19.3 19.5 20.5 20.6 0.5
Total 247.6 305.4 375.9 397.5 425.3 441.5 444.0 0.6
1) 1980: former federal territory, beginning 1990: Germany incl. new Federal States, 2) partially preliminary values, 3) starting 2005: including Pensionskassen and pension funds
included in GDV statistics, 4) until 1994: insured persons (estimated); beginning 1995: risks including compulsory long-term care insurance, foreign travel health insur­ance,
etc.; beginning 2000: new system of counting (changed definitions), not comparable with previous years, beginning 2005: new system of counting (changed definitions),
not comparable with previous years, 5) not including nuclear, aviation and spacecraft liability, and pecuniary liability, as well as credit, suretyship and fidelity insurance; until
2000: excluding marine insurance, 6) number of risks, 7) until 1995: including co-insurance business, 8) from 2007: new system of counting for group and collective contracts –
Source: GDV; PHI Association, Federal Financial Supervisory Authority.

The degree of consolidation in the German in-
surance industry is nevertheless still not dis-
proportionately high, though it is also not
extra­ordinarily low when compared to other
countries. Compared to other European insur­
ance markets or to other property and service
markets in Germany, the degree of consolida-
tion for the German insurance market in no
way exceeds the parameters. Even the most
recent report by the Monopoly Commission
presented in the summer of 2008 once again
saw no reasons to draw negative conclusions
about the competitive situation in the Ger-
man insurance industry based on the degree
of concentration in the industry. On the other
hand, the assessment that the German insur­
ance market is highly fragmented and there-
fore inefficient compared to other interna­
tional markets is definitively untrue, to the
­extent this can be tracked with the available
data.
In view of the specific structures in the Ger-
man insurance industry, the degree of concen-
tration is typically ascertained using data for
insurance groups, not individual companies.
This is due to the fact that many groups are
characterised by a high degree of horizontal
integration, such as shared service centres
and other forms of group-wide cooperation,
e.g. in investments, IT systems or product and
risk management. The market share of the
ten largest groups on the German insurance
market was 67.4 per cent in life assurance and
62.1 per cent (as of 2007) in casualty, property
and accident insurance. This degree of market
concentration thoroughly corresponds to the
market structure in other industrialised coun-
tries. Yet the intensity of competition in the
German insurance industry is additionally
72 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
­ nderscored by the fact that the market share
u The international interdependence
of individual insurers is subject to consider­
able and significantly fluctuating change.
While some providers have gained market
share to a greater or lesser degree, others have
suffered losses in market share, some signifi-
cantly. The volatility of the markets presents
further evidence of the fact that competition
is functioning and by all means intense on the
German insurance market.
Overall, the speculation repeated in recent
­years that the degree of consolidation on the
German insurance market is excessively low,
possibly jeopardising the earnings power and
hence the stability of the German insurance
sector, and that competition and innovation
are restricted through excessive market con-
solidation is therefore hardly true. These sug-
gestions are misleading, not only because
they are not supported by the data. As long as
no concrete barriers exist to voluntary take­
overs, mergers and cooperation agreements
or for market entries, the market structure
will instead be the product of a free-market
optimisation process that exhausts existing
efficiency reserves. Of course, this does not
rule out further changes in market structure.
of the insurance industry
The globalisation of commodity, financial and
service markets, the creation of the European
Internal Market and the introduction of the
euro as well as the proliferation of state-of-
the-art information and communication tech-
nology have caused changes in the strategic
orientation of many insurance companies,
even beyond their respective home countries.
For a not insignificant number of companies,
there was an increased European and interna-
tional orientation. For years now, German in-
surers have become increasingly interested in
business opportunities abroad, while at the
same time the presence of foreign insurers in
the German market has increased.
Though the globalisation of the financial mar-
kets has slowed down somewhat as a result
of the financial and economic crisis, the trend
toward internationalisation of the markets
should continue as the economic recovery
sets in, if temporarily at a slower pace. The
structural changes triggered by the crisis in
German and foreign markets could also bring
new opportunities for German insurers, which
have been less affected by the financial crisis
than other financial service providers.
In the European Internal Market, cross-border
co-operations, holdings and subsidiaries re-
main the primary form of international enga-
gement for insurers, and the number of legal­
ly dependent branch offices is also increas­ing.
In many European insurance markets, the
scope of business controlled by insurance
companies with a registered office in another
member state has increased notably.

Even beyond the EU, the insurance industry is
being increasingly affected by globalisation.
In recent years, international direct insurers
have massively expanded their presence in
the so-called “emerging markets” of central
and eastern Europe, Latin America and South­
east Asia. They have already been in China and
India for a while. For the emerging markets
themselves, the presence of global insurers
means an infusion of capital and know-how,
which can only facilitate the development of
efficient insurance markets, thus furthering
their progress towards increased growth and
wealth. The know-how infusion is by no means
limited to mere actuarial expertise, but can
also, for example, extend to the broad field of
claims prevention.
The insurance industry
as job provider
In contrast to other sectors, the German insur­
ance industry has proven quite robust in the
current crisis on the financial market. Yet the
industry is nevertheless facing a series of chal-
lenges, including the intensification of com-
petition, changes in the political and regulato-
ry framework conditions, and the sustained
change in the structure of the business lands-
cape. Accordingly, in 2008, employment in the
insurance industry displayed a decrease for
the sixth year in a row. The insurance industry’s
overall workforce decreased by 1.2 per cent to
a total of 216 300 employees. This represents
2009 YEARBOOK 73
a decline of 2 600 employees. In 2009, the in-
dustry expects a further reduction in staff
­levels. Including all insurance staff subject to
social security contributions and persons en-
tered in the insurance brokerage register, the
insurance industry provides ­employment for
more than 530 000 people nationwide.
Despite the tough employment situation, the
insurance industry is still striving to see
through the necessary reduction of staff levels
in a careful and socially responsible fashion.
The reduction in employment is therefore
­primarily carried out through “natural fluc­
tuation” and termination of contracts by
­mutual agreement and by expiration. En­
forced redundancies, on the other hand, play
only a negligible role. Meanwhile, the level of
education and part-time work rates have been
increasing for years.
Slight reduction in employment
The employment figures from the Employers’
Association of German Insurance Companies
(AGV), Munich, show that the number of
insur­ance industry employees decreased in
2008 too. The number of office staff and field
service employees decreased last year com­
74 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Survey on the development of employment figures – without staff members in passive part-time employment due to higher age
Figures rounded to full hundreds
Year total change of which: percentages change including
of compared inside change field change trainees change trainees employees in
em­ to staff*) compared service compared compared outsourced
ployees previous in also in companies
to staff to to com­ agencies
year previous previous previous panies
year year year
1998 238 800 – 0.2 % 174 600 – 0.3 % 50 300 – 2.0 % 13 900 9.9 % 5.8 %
1999 239 600 0.3 % 174 000 – 0.3 % 50 800 1.0 % 14 800 6.5 % 6.2 % 242 300
2000 240 200 0.3 % 174 300 0.2 % 50 500 – 0.6 % 15 400 4.3 % 6.4 % 0.5 % 243 500 0.5 %
2001 245 400 2.2 % 178 200 2.2 % 51 300 1.6 % 15 900 3.3 % 6.5 % 0.4 % 249 000 2.3 %
2002 248 100 1.1 % 179 700 0.8 % 52 300 1.9 % 16 100 1.3 % 6.5 % 0.2 % 252 200 1.3 %
2003 244 300 – 1.5 % 178 100 – 0.9 % 51 000 – 2.5 % 15 200 – 5.6 % 6.2 % 0.5 % 248 600 – 1.4 %
2004 240 800 – 1.4 % 176 600 – 0.8 % 50 100 – 1.8 % 14 100 – 7.2 % 5.9 % 0.6 % 245 300 – 1.3 %
2005 233 300 – 3.1 % 171 500 – 2.9 % 48 700 – 2.8 % 13 100 – 7.1 % 5.6 % 0.6 % 238 200 – 2.9 %
2006 225 700 – 3.3 % 167 600 – 2.3 % 45 900 – 5.7 % 12 200 – 6.9 % 5.4 % 0.6 % 230 300 – 3.3 %
2007 218 900 – 3.0 % 162 900 – 2.8 % 44 300 – 3.5 % 11 700 – 4.1 % 5.3 % 0.7 % 223 800 – 2.8 %
2008 216 300 – 1.2 % 161 500 – 0.9 % 43 200 – 2.5 % 11 600 – 0.9 % 5.4 % 0.0 % 221 300 – 1.1 %
The percentages indicated may deviate from those resulting from calculation since absolute figures have been rounded to 100 and percentages have been established before
the rounding was effected. *) incl. non-clerical

pared to the previous year (2007) from
218 900 to 216 300, i.e. by 1.2 (2007: – 3.0) per
cent. The number of office staff decreased by
0.9 per cent, while the number of field service
workers was reduced by 2.5 per cent.
Heterogeneous employment development is
currently evident in 2009. While various
­market participants are still planning conso­
lidations, others want to expand employment
or at least keep it constant. Overall, the trend
towards staff reductions will continue in
2009, according to current estimates.
A slight recovery is evident in initial training.
The number of trainees in insurance com­
panies fortunately decreased by only 0.9
(2007: – 4.1) per cent. At the same time, the
number of training positions in agencies re-
mained constant, so that the traineeship ratio
(proportion of trainees in total workforce)
slightly increased from 6.0 per cent in 2007 to
6.1 per cent. However, many insurance com-
panies had difficulties finding adequate can-
didates to fill all trainees positions. According
to estimates by the companies, a slight in­
crease in training activities can be expected in
2009. Details about the industry’s position
can be found in the above table.
 2009 YEARBOOK 75

Insurance centres: The largest insurance centres

Munich ahead of Cologne Cities with more than 4 000 employees in insurance
Once a year, the Federal Employment Agency (insurance companies and insurance agencies)
measures as of 30 June the number of insur­
ance industry employees (insurance compa-
nies and intermediation business) subject to
social security contributions in a special sur-
vey on behalf of the AGV. According to this
3
survey, the number of employees subject to
social security contributions sank from
292 010 by 6 720 to 285 290 employees in
2008 (– 2.3 per cent). 6
7

With respect to the regional distribution of 12

employees subject to social security, North 11
Rhine-Westphalia displays the highest em- 4
ployment density. With 74 800 (previous year:
2
75 000) employees, a good quarter of all per-
sons employed in the insurance industry work
in this federal state. In Bavaria, 58 650 (20.6 8 10 13
per cent) persons subject to social security
were employed in the insurance industry, in 14 9
Baden-Württemberg 33 180 (11.6 per cent)
and in Hesse 25 950 (9.1 per cent). A dispro- 15
portionately strong decrease in employment 5
was noted in Saxony (– 12.3 per cent), Hesse
(– 8.8 per cent), Baden-Württemberg (– 5.1 1
per cent) and the Saarland (– 4.2 per cent),
while Saxony-Anhalt (+ 1.2 per cent), Thürin-
gen (+ 0.4 per cent) and Berlin (+ 0.2 per cent)
1 Munich) 30 890 6 Berlin 10 890 11 Dortmund 6 430
registered a slight increase. 2 Cologne 26 710 7 Hanover 9 120 12 Münster 6 350
3 Hamburg 22 140 8 Wiesbaden 8 890 13 Coburg 4 690
With 30 890 employees subject to social secu- 4 Düsseldorf 11 650 9 Nuremberg 8 770 14 Mannheim 4 520
5 Stuttgart 11 430 10 Frankfurt 6 580 15 Karlsruhe 4 520
rity, Munich is well ahead of Cologne (26 710)
1) incl. Unterföhring. Source: Federal Employment Agency. Special analysis on behalf of AGV.
and Hamburg (22 140). These cities are follow­
ed at some distance by Düsseldorf (11 650)
and Stuttgart (11 430).
76 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
Fluctuation and absences
In 2008, the fluctuation of employees in the
insurance industry decreased overall. Based
on the average workforce, the fluctuation in
2008 was 6.0 per cent. It had been 6.4 per cent
the year before. Nearly one-third of the
fluctua­tion is natural (2.1 per cent). In the pre-
vious year, it was still 2.2 per cent. Here, de-
partures after passive partial retirement (1.2
per cent) play an important role. Rescissions
by mutual agreement decreased in the indus-
try last year. While 1.6 per cent of the fluctua-
tion was caused by rescissions in 2007, this
­figure was 1.2 per cent in 2008. Also, change
of employment within groups of companies
has shown a significant decrease from 1.5 per
cent to 1.0 per cent. Compared to the previous
year, the percentage of departures occasioned
by the expiration of employment contracts or
by ­dismissals by companies has remained at a
constantly low level. Expiration of contracts
registered 1.1 per cent and dismissal by com-
panies 0.3 per cent.
With respect to the absentee rate, the insur­
ance industry has followed the trend of the
overall economy. Already at the end of February,
the Allgemeine Ortskrankenkassen (AOK) re-
ported an increase in the number of em­
ployees that call in sick amongst the members
it insures. As a result, the increase in the num-
ber of employees calling in sick has continued
since its low in 2006. The absentee rate has
­increased slightly in the insurance industry as
well from 4.6 per cent in 2007 to 4.8 per cent
in 2008. On average, office staff were absent
12.0 days per year, which is half a day more
than in 2007 (11.4 days). Men called in sick on
9.6 (2007: 9.4) days, while women called in
sick on 14.2 (2007: 13.4) days. The absentee
rate for trainees is considerably lower. In 2008,
it was 3.1 per cent, meaning that trainees
were absent a good four days less than their
trained co-workers.
Demographic development
Since the 90s, the average age of insurance
employees has steadily risen: Between 1998
and 2008, the average age has increased by
approximately 3.5 months each year (see
graph on p. 77). In 2008, the average employee
was 41.2 years old (including trainees), while
in 1998 the average age was 38.1 years. On
average, male employees (42.1 years; 1998:
39.3) were older than female employees (40.2
years; 1998: 36.6). The average length of ser-
vice also increased from 11.1 years in 1998 to
13.8 years in 2008 (including trainees). No­
table with regard to the age structure is the
striking decrease in the proportion of em­
ployees younger than 36 years of age and the
increase in employees 36 years and older. In
2008, 21.8 per cent of the employees (includ­
ing trainees) were older than 50 years.
The increasing importance of variable salary
components
It has been common in the insurance industry
for a long time for field service employees to
receive most of their compensation contingent
on their performance, i.e. variably in the form
of commissions. However, employed office
staff are now also receiving more and more
variable salary components. On average, of-
 2009 YEARBOOK 77

fice staff (not including executives) received Age structure

4.4 per cent of their salary in 2008 in the form Total
of variable special payments. Five years ago,
  642)
this share had still been 2.1 per cent. The 63 As of 2003
­annual basic salary including allowances 62
61
Women 2008
reached a share of 85.2 per cent in 2008 (2003: 60 Men 2008
59
85.5 per cent), fixed special payments (pri­ 58
marily includ­ing special collective payments 57
56
of 1.3 months’ salary) 10.4 per cent (2003: 55
12.3 per cent). 54
53
52
Executives display a much clearer increase in 51
50
variable salary components: While executives 49
were paid 15.9 per cent of their salary as vari- 48
47
able special payments in 2003, this figure is 46
now 18.6 per cent five years later. Office staff 45
44
executives receive 78.3 (2003: 79.7 per cent) 43
of their salary in the form of an annual basic 42
41
salary including allowances and 3.1 (2003: 4.3 40
per cent) in the form of fixed special pay- 39
38
ments. 37
36
35
Training and further education 34
33
A service industry such as the insurance in-
32
dustry has a strong interest in having the best 31
30
qualified employees. For 60 years, the Voca­ 29
tional Training Centre (BWV), with its 38 re­ 28
27
gional locations, and the German Insurance 26
Academy (DVA) have provided the German 25
24
­insurance industry with a comprehensive 23
education­al network. The high degree of qual­ 22
21
ity aware­ness in the educational network is 20
under­scored through the certification of the 19 1) 18 and younger
  181) 2) 64 and older
BWV in accordance with DIN EN ISO
9001:2000 in 2008 and the ongoing certifica-
tions of its partners in 2009 and 2010.

In 2008, the industry trained a total of 13 550 cessing, real estate and other vocations (e.g.
employees to become insurance and financial gastronomy).
sales clerks. Insurance companies also provid­
ed training in office management, data pro-
78 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
The Vocational Training Centre provides
employ­ees of the insurance industry with a
wide range of vocational entrance opportu­
nities, the relevant qualifications and even
academic degrees.
Qualifying examination for insurance
intermediaries
After the implementation of the EU Insurance
Mediation Directive, the high quality stand­
ards placed by the insurance industry on its
examination for insurance intermediaries are
anchored in a public-law examination to ob-
tain the title “Certified Insurance Specialist
(Chamber of Industry and Commerce)”. An
amendment to the Insurance Mediation and
Consultancy Ordinance (VersVermV) man­
aged to assure a challenging test procedure
­aimed at the provision of competent advice to
customers.
All in all, since the industry introduced the
“Insurance Specialist” examination in 1991,
125 095 participants have proven their profes-
sional competence by passing the exam. In
2008 and 2009 (as of July 2009), a total of
13 840 participants successfully passed the
public-law examination to qualify as “Certi-
fied Insurance Specialists (Chamber of Indus­
try and Commerce)”. The success rate was
67.6 per cent in 2009.
Various advanced modules by the DVA com-
plement the “Certified Insurance Specialist”
course by the Chamber of Industry and Com-
merce and extend the competence profile of
intermediaries:
n home purchase savings and investment
(16 450 successful participants
since 2000)
n occupational retirement provision
(1 395 successful participants
since 2002)
n commercial customers in property insurance
(563 successful participants
since 2002)
The Vocational Training Centre offers the “Cer-
tified Insurance Specialist (Chamber of Indus-
try and Commerce)” educational programme
in three forms: courses requiring personal
­attendance are taught by the regional Voca-
tional Training Centres and online courses and
courses inside companies are taught by the
DVA. All in all, 1 340 participants were prepped
by the educational network in 2008 for the
specialist examination (630 participants in
­attendance courses and 710 participants in
online and in-house courses).
The industry-wide qualifying course for “Insur­
ance Service Specialists (DVA)” for employees
of service centres and agencies was adapted
and modified to the altered market circum-
stances and legal framework conditions in or-
der to bring it in line with the industry’s high
quality requirements for the future.
 2009 YEARBOOK 79

In the service of security

Insurance intermediaries and

insurance advisers6) as well as employees
subject to social security contributions

Employees subject to 285 290

social security contributions1)

Total of insurance intermediaries2) 246 443

thereof …

Tied insurance intermediaries3) 172 611

Insurance brokers 38 883

Insurance agents with permission4) 32 484

Product-accessory intermediaries5) 2 465

0 60 000 120 000 180 000 240 000 300 000

1) as of 30 June 2008
2) as of April 2009
3) single-tied agents registered by insurance companies within the meaning
of Sect. 34d para. 4 GewO
4) Single- and multi-tied agents with concession of the competent Chamber
of Commerce and Industry
5) Traders selling insurance as a supplement to the goods or services supplied within
the scope of their principal activity and exercising their activity directly on behalf
of one or more insurance intermediaries holding a permission or of one or more
insurance companies (Sect. 34d para. 3 GewO)
6) Number as of April 2009: 165.
Insurance advisers are traders advising on insurance without receiving any economic
benefit from an insurance company or otherwise being dependent on it (Sect. 34e GewO)
Source: AGV; DIHK; BA

© GDV-Jahrbuch 2009
80 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT
Basic training for
“insurance and financial sales clerks”
The basic training in companies and voca­
tional schools is supported by the Vocational
Training Centre BWV through:
n Qualifying examinations and exchange of
experience for examiners and trainers
n Seminars for insurance instructors
n Providing instruction and test prep courses
for trainings in various companies
n Publication of a text book series
n Publication of supporting training
and testing material
n Development of further support media for
test preparation – training film on the oral
examination
n Providing the online platform
azubi-welt.de for trainees, prospective
trainees and instructors
n Providing a job exchange for insurance
sales people who have completed their
training: azubi-stellenboerse.de
n Providing insurance curriculum for
trainees, vocational school students
and lateral entrants
n Assistance in the job application process
and the vocational profile of training
graduates
n Development of a cost-benefit model to
make training costs transparent
Further education for
“Certified Insurance Business Administrators”
and “Certified Business Administrators for
Insurance and Finance”
Elementary further education for employees
has traditionally been of great importance
within the insurance industry. In 2008, 1 239
Certified Insurance Business Administrators
successfully completed courses after taking
the Chamber of Industry and Commerce
exam­ination.
The further vocational training to become a
Certified Insurance Business Administrator
was revised in 2007 and adapted to current
and future market requirements. The new
Training Ordinance took effect as of 1 January
2009. The title received with the degree is
now: “Certified Business Administrator for
­Insurance and Finance”.
Certified Business Administrators for Insur­
ance and Finance are qualified to carry out im-
portant duties independently, both in the in-
surance and finance business as well as in the
respective organisational units of other com-
mercial enterprises. This includes in particular:
n Analysis and assessment of operational
issues based on business administration,
economic and legal contexts as well as the
appropriate action to be taken as a result
n The carrying out of risk analyses and
demand assessments as well as the
development of customer-oriented
problem-solving strategies for private
and commercial risks
n The observance of executive and qualifica-
tion functions as well as conception
and implementation of projects under the
systematic and target-oriented application
of management principles and communi-
cation techniques
n The initiation of the development of
innovative products as well as participa­
tion in product development projects

n The carrying out of qualified tasks in one of
the chosen operative core processes:
– In sales management: the organisation
and optimisation of business processes in
sales
– In risk management: management of
complex risks
– In claims/benefit management: the
handling of complex claims and benefit
cases taking into account assistance
benefits.
The Vocational Training Centre (BWV) offers
the further education courses to become a
Certified Business Administrator for Insurance
and Finance in two forms: courses requiring
per­sonal attendance are taught by the regional
Vocational Training Centres and online distance
study courses are taught by the DVA.
Studies to receive a Bachelor of Arts
The in-service insurance business economist
(DVA) course has established itself as a valued
alternative to full-time study at a university
and has now been complemented by a Bache-
lor of Insurance Practice degree. Now reorgan­
ised, the likewise in-service, decentralised
course of study for a Bachelor of Arts degree
will replace the previous two-track course as
of the autumn of 2010. The DVA offers this
compact course of study in cooperation with
the Institute for Insurance at the Cologne Uni-
versity of Applied Sciences.
The course of study combines economics and
insurance-specific subjects. The linkage of
study and practice emulates the combination
of academic expertise and practical know-
how sought by companies. The study is organ­
2009 YEARBOOK 81
ised in a modular fashion and is offered
nation­wide with the regional Vocational
­Training Centres at various study locations. An
in-depth master’s course of study can follow
the bachelor’s degree.
Further education for specialists
In addition to the classical courses offered by
the DVA, numerous courses of study for
­specialists have been successfully established.
These courses are characterised by a higher
degree of insurance expertise and practical
application. The DVA conducts these courses
of study in a nationwide standardised form in
cooperation with the regional Vocational
­Training Centres at more than 10 study loca-
tions. Not only do graduates of the courses
­acquire specialised and methodological skills,
they can also point to a degree and title that is
known and recognised nationwide and in vari-
ous companies. Since the courses of study
were established in 2007, more than 950
­successful participants now use the title of
“­Specialist” with the relevant addition:
n Occupational retirement
provision specialist (DVA)
n Marine insurance specialist (DVA)
n Actuarial underwriter for commercial and
industrial property insurance (DVA)
n Liability underwriter (DVA)
n Personal insurance specialist (DVA)
n Claims specialist (DVA)
n Fraud containment specialist (DVA)
n Risk management specialist (DVA)
82 2009 YEARBOOK BUSINESS TRENDS, RESULTS AND ENVIRONMENT

Qualifications for rising

Master sales requirements
Only with well-founded expertise can an
Bachelor of ­intermediary offer customers the right com-
Insurance
prehensive solutions to their needs. This is
Practice (DVA)
Recognitions also true for their role as entrepreneurs: With­
Fraud Combating

(CII &
out business administration know-how, an
Risk Mgt.
Non-Life

Switzerland) Other
Marine
HUW
TUW

Insurance
BAV

PHI

Bachelor inter­mediary will not enjoy sustained success.

Financial Business
Planner Economist The DVA provides sales managers and em­
(eficert) (DVA) ploy­ees qualifications to meet the market’s
Specialist courses (DVA) ­rising requirements. This includes, for example,
Integrated
Other advanced training for experts based on the
Certified Business Administrator for Business courses
Insurance and Finance (IHK) Adminis­ (AIS/BA) expert examination offered by the Chamber
trators of Industry and Commerce. But it also includes
courses of study for certificates such as:
Financial Expert Expert Expert
Adviser
n Certified Brokerage Manager (DVA)
B&I BAV GK SV Certified
(eficert) (DVA) (DVA) (DVA) Insurance n Certified Agency Manager (DVA)
and n Certified Insurance Sales Manager (DVA)
Europ. Finance Sales
Insurance
Insurance Clerk (IHK)
Certified Insurance Service
Intermediary Conferences and conventions
Expert IHK Specialist
(eficert)
(DVA) In 2008, the DVA supported the organisation
of a total of 44 information events and expert
conferences by GDV and carried out joint con-
ferences on current issues in the industry with
A new “Health insurance Specialist (DVA)” a total of approximately 4 800 participants.
course will be offered as of the autumn of Furthermore, in the same time period, 37 se-
2009. The course of study will initially begin at minars with 250 participants were carried
three locations nationwide. out.

Seminars for employee representatives DVA and BWV organise the annual training
In cooperation with the Employers’ Association congress of the German insurance industry,
of Insurance Companies in Germany (AGV), which is attended by over 300 human resourc­
the BWV offers a full range of seminars for: es and training specialists from the industry.
n works council members
n youth and trainee representatives
n employee representatives in supervisory
boards
n members of the Economic Committee
n representatives for the severely handicapped

Cooperation between European insurance
and training institutions
The European Financial Certification Organi-
sation (eficert) was formed on 8 November
2002 in Madrid, as an association of the Euro-
pean training institutions of the insurance
and financial sector. The organisation certifies
European financial services qualifications
based on consistent and transparent stand­
ards and develops European quality seals. The
European titles “Financial Adviser (eficert)”
and “Financial Planner (eficert)” stand for
­internationally recognised skills in sales.
Eficert has also established itself as the Euro-
pean platform for the development of train­
ing policies in the financial services sector. It
promotes discussion on the growing impact
of European training initiatives within the
­financial services sector. In the forefront is the
definition of European standards of compe-
tence, which will be the wave of the future
­especially for distribution in a European Eco-
nomic Area with freedom to provide services
and freedom of establishment. The European
Qualifications Framework (EQF) is to find con-
crete application in the “European Insurance
Intermediary (eficert)” model project.
Support of the initiative
“Creating the MINT future”
As of 1 March 2008 the BDA and BDI set up
the initiative “Creating the MINT future”. The
reason for this is the alarming lack of skilled
labour in the “MINT” area (mathematics, IT,
natural science and technology) that is
becom­ing an ever greater obstacle for growth
in Germany. According to the OECD, the
­graduate rate in engineering and natural
­sciences in Germany is not sufficient to pre-
serve the status quo.
2009 YEARBOOK 83
The aim of the MINT initiative is to positively
influence young people’s attitudes towards
technology and thus to influence the respect­
ive decisions they make in schools and colle-
ges concerning their future professional ca­
reers. The insurance industry is also affected by
a lack of these qualifications. That is why the
BWV is supporting the initiative as a sponsor
and also plays an active part in the board of
trustees of MINT Zukunft e.V. and is launching
its own project to acquire MINT ambassadors
from the insurance industry in the period
from 2009 to 2011. The BWV is especially
inter­ested in showing pupils and graduates
the variety of fields of activity in the insurance
industry also in the MINT areas.
The “InnoWard” education award
Vocational training and employee develop-
ment in the insurance industry are on a high
level. This is proven every year by the concepts
in the areas of vocational training and em­
ploy­ee development and qualification that are
awarded the InnoWard by the insurance in-
dustry education network. An independent
expert jury chooses concepts from which they
expect positive impulses for educational work
in the insurance industry and that have already
proven their value in practice. The BWV ex-
pects the InnoWard to further increase the
qualification standards in the industry.
The InnoWard education prize was first
award­ed at the education congress 2005 in
Berlin. The best-practice concepts of the prize
winners as well as all contenders are pre­­
sented on the internet at www.innoward.de.
XX Jahrbuch
2009
2009
YEARBOOK VERSICHERUNGSZWEIGE UND -ARTEN 84 | XX
Jahrbuch 2009 85

Insurance classes
The following chapter illustrates business development in the individual insurance classes
and the trends registered in 2009. Reports with the final figures for 2008 appear after a
description of the current situation in each line. The classes will be considered one after
another in the following order: life assurance, Pensionskassen and pension funds, private
health insurance (PHI), casualty, property and accident insurance (motor, general liability,
accident, legal expenses, property, marine and credit insurance) as well as insurance classes
for which no specific grouping exists within GDV (nuclear insurance, insolvency insurance
through the Pension Assurance Association and reinsurance).

and types
86 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Premium income in life assurance (without Pensionskassen and pension Premium revenues and portfolio growth
funds), savings and savings ratio of private household Gross premiums written for life assurance
From 1991 for Eastern and Western Germany ­com­panies, Pensionskassen and pension funds
Year premium income1) private savings ratio combined came out to 39.6 billion EUR in the
savings2) of private
increase households3) first half of 2009, including 38.1 billion for life
EUR bn as % EUR bn as % assurance in the narrow sense, a gain of 6.6
1980 13.215 8.8   68.4 13.1 per cent over the year before in each case.
1985 18.385 6.1   74.6 11.7
1990 27.403 9.5 113.7 13.7
For the year as a whole, Germans are expected
1995 45.201 6.6 131.7 11.0
2000 61.225 4.2 123.2   9.2 to spend 80.1 billion EUR (year before: 76.3
2001 62.387 1.9 130.9   9.4 ­bil­lion EUR) on life assurance in the narrow
2002 65.018 4.2 139.3   9.9 ­sense, and another 3.3 billion EUR (year before:
2003 67.618 4.0 147.2 10.3 3.3 billion EUR) on Pensionskassen and pen­sion
2004 68.399 1.2 151.4 10.4 funds.
2005 72.636 6.2 156.7 10.6
2006 74.872 3.1 159.0 10.5
The life assurance portfolio for life assurance
2007 75.434 0.8 167.1 10.8
2008 76.293 1.1 181.5 11.5 in the narrow sense is expected to total 91.5
1) gross premiums written by member companies, without profit shares used as insurance premiums,
million primary contracts at the end of the
2) including claims against company pension funds, 3) savings as a percentage of disposable income – year, down slightly from the year before. How-
Source: GDV, Integrated Economic Accounts.
ever, the pension and pension investment
fund portfolio should grow.

Payouts and provisions for benefits

Life assurance, As in previous years, payouts to life assurance
Pensionskassen and pension funds customers were high in 2009. In the first half
of the year, the amount paid out to customers
For German life assurers, the year 2009 was in life assurance in the narrow sense was
dominated by the capital market crisis and about 33.2 billion EUR, 0.7 per cent higher
the need for security. Confidence in the ability than in the first half of 2008. For the year as a
of life assurers to meet their obligations trig- whole, the total should reach about 75.2 bil­
gered an unexpectedly strong rise in new lion EUR (a gain of 1 per cent).
­single premiums and clear growth in premium
revenues, which is especially apparent in the
single-premium annuity insurance segment.
The trend towards single premiums was rein-
forced by the growth in product flexibility, as
many life assurers now offer the option of
­extraordinary payments.
 2009 YEARBOOK 87

How people insure their lives

Average insured amount 2004

in newly redeemed policies 2005
(not including amount
2006
increases), in EUR
Life assurance in the narrow 2007
sense (i.e. without Pensions- 2008
kassen and pension funds)

Private endowment 19 750

11 650
9 350
9 050
9 000

Private term 71 200

71 600
73 700
75 100
77 750

Private annuity 20 200

15 600
14 200
13 400
16 450

Private occupational disability 118 400

121 600
insurance
121 750
117 750
118 800

0 25 000 50 000 75 000 100 000 125 000

© GDV-Jahrbuch 2009
88 2009 YEARBOOK INSURANCE CLASSES AND TYPES
New business
About 3.0 million new life assurance, Pensions­
kassen and pension fund contracts were con-
cluded in the first half of 2009, for an insur­ed
amount of 109.5 billion EUR, a 7.2 per cent
drop in the number of contracts and an 11.3
per cent decline in insured amount.
Projections indicate that around 6.2 million
new contracts will be concluded in 2009 in life
assurance in the narrow sense, a de­cline of 7
per cent. Together with new Pensions­kassen
and pension fund contracts, overall new busi-
ness is expected to reach 6.5 million contracts.
Periodic premiums from new business came
out to 2.6 billion EUR in the first half of 2009,
27.3 per cent lower than in the first half of
2008. However, the rate of change in periodic
premiums was affected by the increase in
sums triggered by the last Riester deduction
level in spring of 2008. Single premiums from
new business increased by 44.4 per cent in the
first half of 2009, to 8.7 billion EUR. These pre-
miums came primarily from private annuity
insurance. Total premiums from new business
(11.3 billion EUR) increased by 17.7 per cent in
the first half of 2009.
However, the significance of single premiums
is lessened when seen in the context of total
premiums from new business, which includes
all periodic premiums due over the entire
term of the contracts for new contracts fea-
turing periodic premiums, and the single pre-
miums from contracts calling for single pre-
miums. Accordingly, it is a measure of mar­
keting success, demonstrating the willingness
of customers to undergo long-term life assur­
ance contracts. Total premiums from new
business in life assurance in the narrow sense
came to 65.3 billion EUR in the first half of
2009, a decline of 22.3 per cent. Single pre­
miums came to 8.5 billion EUR (+ 44.0 per
cent), so that 56.8 bil­lion EUR was earned
through periodic pre­miums (– 27.2 per cent).
Periodic premiums from new business
reached 2.5 billion EUR (– 27.7 per cent). In
­order to adjust for the afore­mentioned Riester
effect, we must factor out the increased sums
in Riester contracts out of periodic premiums
from new business: when periodic premiums
from new business are adjusted in this man-
ner, they come to about 2.3 billion EUR in the
first half of 2009, for a decline of 9.5 per cent.
For the year as whole, life assurers in the nar-
row sense expect around 18.0 billion EUR in
single premiums (+ 45 per cent) and 5.7 billion
EUR in periodic premiums (– 17 per cent), not
including premiums paid to Pensions­kassen
and pension funds.
 2009 YEARBOOK 89

Life assurance (without Pensionskassen and pension funds): time series of redeemed new business
Number in thousands (share as per cent)
1980 1990 19953) 2000 2005 2007 2008
Individual insurances
endowment insurances 3 084.2 59.3 4 939.8 63.6 2 768.5 41.0 1 486.5 20.3 962.4 13.1 713.1 9.4 563.3 8.4
unit-linked endowment
insurances 12.2 0.2 150.6 1.9 220.1 3.2 1 281.7 17.5 391.8 5.3 255.7 3.4 229.0 3.4
unit-linked annuity
insurances 857.0 11.7 1 660.3 21.8 1 584.5 23.7
term insurances1) 1 271.3 24.5 1 456.5 18.7 603.9 8.9 649.4 8.9 738.7 10.1 726.9 9.5 668.3 10.0
pension and
annuity insurances 65.1 1.3 170.9 2.2 727.7 10.8 961.8 13.2 1 868.7 25.5 1 876.6 24.6 1 355.7 20.3
occupational disability
insurances 22.0 0.3 38.8 0.6 184.4 2.5 323.6 4.4 360.3 4.7 324.0 4.8
long-term care insurances 0.4 0.0 4.2 0.1 0.1 0.0 5.3 0.1 11.8 0.2 10.7 0.2
other individual
insurances2) 6.8 0.1 6.1 0.1 73.0 0.9 81.3 1.1 71.0 1.1
Collective insurances
endowment insurances 207.5 4.0 375.6 4.8
473.9 7.0 468.3 6.4 391.8 5.3 276.8 3.6 231.3 3.4
builder’s risk insurances 525.8 10.1 603.8 7.8
585.9 8.7 544.3 7.5 290.2 4.0 278.8 3.7 302.5 4.5
residual debt insurances 1 183.7 17.5 1 481.2 20.3 1 103.5 15.1 954.4 12.5 900.3 13.5
other collective insurances 31.6 0.6 53.6 0.7 140.2 2.1 238.0 3.3 331.0 4.5 421.4 5.5 446.4 6.7
Total new business 5 197.6 100.0 7 773.1 100.0 6 753.7 100.0 7 301.8 100.0 7 337.0 100.0 7 617.4 100.0 6 686.9 100.0
1) until 1994 including residual debt insurances, 2) life assurances without profit sharing, tontine insurances and capitalization business, etc., 3) from 1995 change in accounting
rules, comparison with previous year not possible.

The structure of new business in life assur­ with “conventional” guaranteed benefits was
ance in the narrow sense shows clear differen- nearly the same as in the year before, coming
ces between the insurance classes. New busi- to a total of 1.14 million (– 1.6 per cent).
ness in the first half of 2009 showed a trend
towards life assurance contracts with guaran- The trend towards annuity insurance was
teed benefits, primarily with pension-like pay- ­ pparent in 2009 as well: while endowment
a
outs. 639 200 unit-linked life assurance con- life assurance made up 15.3 per cent of total
tracts were concluded in the first half of 2009, new business (year before: 15.3 per cent), an-
a 29.6 per cent decrease relative to the pre­ nuity policies accounted for 46.8 per cent of
vious year. This total was divided between the total (year before: 51.6 per cent).
­endowment and annuity insurance, with
79 500 unit-linked endowment insurance
­policies (– 26.1 per cent) and 559 700 unit-
linked annuity insurance policies (– 30.1 per
cent). The number of new capital-accumu­
lating life and annuity insurance contracts
90 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Breakdown of premium income in life assurance number of contracts, and 4.9 per cent of the
(without Pensionskassen and pension funds) insured amount. About 149 500 occupa­tional
Member companies disability insurance contracts were concluded
Year premiums1) from in the first half of the year, up 8.2 per cent, and
principal insurance2) supplementary insurance3) the insured amount increased to 21.2 billion
EUR bn EUR bn EUR (+ 11.9 per cent).
1980 12.617 0.598
1985 17.413 0.972
1990 25.914 1.489 A look back at 2008
1995 42.829 2.372
2000 57.839 3.386 Premium revenues for life assurers, Pensions­
2001 58.554 3.833 kassen and pension funds increased slightly in
2002 60.739 4.279 2008 in spite of the worsening financial crisis
2003 63.071 4.547 and growing uncertainty: Germans spent a
2004 63.619 4.780
­total of 79.6 billion EUR (2007: 79.0) in pre­
2005 67.501 5.135
miums for life assurance policies, 0.8 per cent
2006 69.770 5.102
2007 70.143 5.291 more than in 2007.
2008 70.759 5.534
1) without profit shares used as insurance premiums, 2) individual endowment insurance including New business
term and unit-linked life assurance; asset formation assurance; individual annuity insurance; group New business fell by 12.5 per cent in 2008, to
insurance at special rates, 3) supplementary accident insurance, supplementary occupational disability
insurance, other supplementary insurance. 6.9 million contracts (2007: 7.9 million). Of
the 6.9 million new contracts, about 6.7 mil­
lion contracts were for life assurance in the
narrow sense (– 12.2 per cent).
Sales of Riester contracts fell to 572 000 in the
first half of the year (– 27.3 per cent). For the Despite the overall decline, the structure of
year as a whole, about 1.3 million contracts new business reveals the dominance of an­
are expected. Most of the new Riester pen­ nuity insurance: there were about 1.4 million
sions in the first half of the year were unit- private annuity contracts (20.3 per cent of all
linked Riester contracts (about 52 per cent). new business), 27.8 per cent less than in 2007.
Unit-linked annuity insurance accounted for
The number of new private endowment insur­ about 1.6 million contracts (23.7 per cent of
ance contracts increased to 268 400 (+ 5.0 per the total), 4.6 per cent less than in 2007. Pri­
cent) and the insured amount increased by vate and unit-linked annuity insurance con-
5.5 per cent, to 5.3 billion EUR. Private endow- tracts also include most of the Riester policies,
ment insurance contracts accounted for 9.4 about 1.6 million. The number of new private
per cent of new business in terms of the total endowment insurance contracts fell to around
563 300 (2007: 713 100), and there were
 2009 YEARBOOK 91

Protection of the public through life assurance

Insured amounts (portfolio) Portfolio figures, in EUR

per resident for total life Total life assurance contracts1)
assurance and capital
Capital accumulation
accumulation contracts from
1990 for Germany as a whole contracts2)

1985 9 350
7 870

1990 11 240
9 470

1995 16 600
13 760

2000 22 790
17 900

2005 29 140
20 760

2006 29 890
20 860

2007 30 640
20 990

2008 31 310
21 060

0 5 000 10 000 15 000 20 000 25 000 30 000

1) a ll insurance types; from 2002

including Pensionskassen
2) endowment and annuity assurances;
from 2002 including Pensionskassen

© GDV-Jahrbuch 2009
92 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Benefits paid by life assurers (without Pensionskassen and pension funds) Measured by total premium revenues from
Member companies new business in life assurance in the narrow
Year benefits increase total payments sense, new business increased by 9.5 per cent
paid in liabilities1) for the benefit to 168.4 (2007: 153.9) billion EUR. This in­
of policyholders
per working change cludes 156.1 billion EUR from life assurance
day2) against policies with periodic premiums (+ 9.9 per
previous year
EUR bn EUR m EUR bn EUR bn as % cent) and 12.4 billion EUR from life assurance
1980 5.788 22.3 9.369 15.157 – policies with single premiums (+ 4.0 per cent).
1985 11.295 43.4 13.887 25.182 9.9
1990 17.888 68.8 17.021 34.909 2.9 Periodic premium payments for one year
1995 30.817 118.5 30.926 61.743 12.2
amounted to 6.9 billion EUR, including 4.5 bil-
2000 49.405 190.0 38.675 88.080 4.8
lion EUR from redeemed policies and 2.4 bil­
2001 52.340 201.3 28.920 81.260 – 7.7
2002 56.244 216.3 18.940 75.184 – 7.5 lion EUR from increases in the insured
2003 65.233 250.9 19.476 84.709 12.7 amount. 1.8 billion EUR of the latter resulted
2004 64.418 247.8 17.204 81.622 – 3.6 from adjusted increases.
2005 64.007 246.2 30.617 94.624 15.9
2006 66.462 255.6 28.916 95.378 0.8 96 million primary contracts
2007 66.161 254.5 25.641 91.802 – 3.7
Life assurance, Pensionskassen and pension
2008 71.828 276.3 – 2.653 69.175 – 24.6
funds are of extraordinary importance as an
1) provisions and profit shares for future payments for the benefit of policyholders, 2) average of 260
days. instrument for making provisions for retire-
ment and surviving dependants. The number
of life assurance contracts far exceeds the
overall population of around 82 million: as of
668 300 new private term insurance contracts 31 December 2008, there were 96.3 (2007:
(– 8.1 per cent). The number of collective poli- 97.2) million contracts. The fact that the total
cies fell by 2.6 per cent, to 1.9 million, includ­ number of contracts was down slightly (by 1.0
ing endowment, builder’s risk, residual debt per cent) even though new business remains
and other term and annuity insurance con- strong demonstrates the vital role which life
tracts. assurance is already playing in providing for
the public’s needs: many policies have ma­
The total insured amount from new business tured, and are already contributing to the
increased by 2.6 per cent, to 249.3 (2007: ­security of retirees, persons with disabilities
243.1) billion EUR. This includes 5 per cent and sur­viving dependants. The significance of
(2007: 6 per cent) for private endowment in- life assurance will continue to grow as the
surance, 22 per cent (2007: 23 per cent) for pension reform process continues.
private term insurance and 15 per cent (2007:
13 per cent) for private annuity and pension A total of 92.8 million of these primary insur­
insurance. ance contracts (2007: 93.9 million) were for
life assurance in the narrow sense alone.
Many of those contracts (35 per cent in 2008)
came with supplementary policies. The num-
 2009 YEARBOOK 93

ber of supplementary policies totalled 32.8 Overview of results in life assurance, Pensionskassen and pension funds*)
(2007: 34.3) million contracts, and their insured 2008 change 2007
amount, or capitalised annuity, came out to as %
New business
1 370.0 (2007: 1 388.1) billion EUR. Of these
number of contracts 6.9 million – 12.5 7.9 million
supplementary policies, 11.9 million were ac-
premium 20.0 EUR bn 3.1 19.4 EUR bn
cidental death policies and 14.6 million were regular premium 7.1 EUR bn 6.4 6.7 EUR bn
occupational disability or general disability single premium 12.9 EUR bn 1.4 12.7 EUR bn
policies. These numbers demonstrate that sum insured 253.8 EUR bn 2.3 248.0 EUR bn
consumers are generally becoming less inter­ Business in force
ested in adding supplementary coverage to number of contracts 96.3 million – 1.0 97.2 million
Gross premiums written (without
their life assurance policies. However, those premiums resulting from bonus
who do opt for supplementary coverage are and rebate provisions) 79.6 EUR bn 0.8 79.0 EUR bn
becoming more and more likely to choose oc- *) The GDV statistics register 26 inter-company Pensionskassen and 18 pension funds (mostly new insti­
tutions established by insurers).
cupational disability coverage.

Overview of results in life assurance

With respect to the primary policy portfolio
(without Pensionskassen and pension funds)
structure, private endowment policies were
2008 change 2007
once again the largest group in 2008, albeit as %
with a declining trend, accounting for about New business
38 (2007: 40) per cent of the total number of number of contracts 6.7 million – 12.2 7.6 million
contracts, followed by private annuity policies, premium 19.3 EUR bn 5.1 18.3 EUR bn
with a good 19 (2007: 19) per cent of the total regular premium 6.9 EUR bn 7.2 6.4 EUR bn
single premium 12.4 EUR bn 4.0 11.9 EUR bn
portfolio, and unit-linked life and annuity in-
sum insured 249.3 EUR bn 2.6 243.1 EUR bn
surance, with 14 (2007: 13) per cent.
Business in force
(principle insurances)
The number of Riester contracts reached 9.1 number of contracts 92.8 million – 1.2 93.9 million
million on 31 December 2008 (year before: 8.0 thereof: life assurances eligible
for assistance
million, for a gain of 13.5 per cent). The major­ (“Riester products”)
ity of this number was made up of private number of new contracts 1.6 million – 24.1 2.1 million
­policies, with 5.8 million (year before: 5.5 mil- number of contracts 9.1 million 13.5 8.0 million
lion, up 6.6 per cent), or 64 per cent of all Riester “basic pensions”
New business 284 000 318 000
contracts (year before: 68 per cent). Another contracts – 10.5 contracts
35 per cent were comprised of unit-linked an- Portfolio 855 000 608 000
nuities. Only 1 per cent of Riester contracts contracts 40.6 contracts
Gross premiums written (without
were collective policies. premiums resulting from bonus
and rebate provisions) 76.3 EUR bn 1.1 75.4 EUR bn
94 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Development of direct insurance and reinsurance Strong engagement in

Portfolio at year-end occupational pensions
direct insurance1) Life assurance contracts continue to play a
End of year number of contracts insured sum ­significant role in occupational pensions as
in millions EUR bn well. The number of direct insurance contracts
  19742) 1.34 7.1 increased in 2008, to 6.4 million contracts
1980 2.41 27.9
(+ 3.7 per cent). In the years since the Act for
1990 3.83 67.9
the Improvement of Occupational Retirement
2000 5.80 148.0
2001 5.90 151.5 Provision took effect in 1974, the number of
2002 5.83 153.2 direct insur­ance contracts has more than
2003 5.82 153.7 quad­rupled and the insured amount increased
2004 5.94 158.4 from 7.1 to 173.3 billion EUR in the same peri-
2005 5.86 157.0 od.
2006 6.02 162.5
2007 6.17 166.8
As of the end of 2008, there were about 2.5
2008 6.40 173.3
reinsurance3) (year before: 2.4) million reinsurance con-
End of year number of contracts insured sum tracts, with an insured amount of 97.6 (year
in millions EUR bn before: 95.1) billion EUR. These policies serve
2000 1.33 66.1 as reinsurance for direct commitments and
2001 1.50 77.2 benevolent funds.
2002 1.80 86.3
2003 2.03 89.6
Development of Pensionskassen
2004 2.18 91.0
2005 2.27 92.0
and pension funds
2006 2.36 91.1 The total number of Pensionskassen and pen-
2007 2.37 95.1 sion fund contracts also increased, to 3.5 mil-
2008 2.50 97.6 lion (+ 4.4 per cent), with an insured amount,
1) a direct insurance policy is a life assurance contract which an employer effects for the benefit of his or capitalised annuity, of 66.8 billion EUR
employees under a company pension scheme, 2) entry into force of the Act for the Improvement of
Occupational Retirement Provision, 3) a reinsurance policy is a life assurance contract which an employer (– 0.1 per cent). The overwhelming majority of
effects for the benefit of his employees under a group insurance scheme. It covers pension commit- this number, 3.2 million contracts, consisted
ments which he has taken against his employees – Source: GDV.
of pension insurance contracts in their expec­
t­ancy phases. Periodic premiums for one year
as of 31 December 2008 (primary policies
The cancellation rate increased slightly in only) came out to 2.7 billion EUR (+ 0.6 per
2008, to 4.0 per cent of the total number of cent).
contracts (2007: 3.8 per cent). Unemployment
and bankruptcy, as well as divorce, are the However, new business declined in 2008,
main reasons for the surrender of life assur­ prob­ably as a result of the general economic
ance policies. downturn. About 247 800 people began to
make provisions for retirement through
­Pensionskassen and pension funds in 2008
(– 21 per cent), the majority of whom, around
222 100, concluded pension fund contracts.
 2009 YEARBOOK 95

Breakdown of benefits paid in life assurance (without Pensionskassen and pension funds)
Breakdown of benefits 2007 2008 change
against
share share previous year
EUR m as % EUR m as % as %
Total benefits paid 46 060.4 69.6 49 585.5 69.0 7.7
thereof:
capital benefits from principal insurances 38 955.3 58.9 41 838.7 58.2 7.4
thereof due by
death 3 588.8 5.4 3 728.3 5.2 3.9
disability, marriage or other causes 130.5 0.2 127.5 0.2 – 2.3
maturity 35 236.0 53.3 37 982.9 52.8 7.8
pension benefits from principal insurances 4 531.1 6.9 4 769.8 6.6 5.3
capital benefits from supplementary insurances 215.9 0.3 228.6 0.3 5.8
pension benefits from supplementary insurances 1 733.3 2.6 1 847.6 2.6 6.6
other benefits 624.8 0.9 900.8 1.3 44.2
Benefits paid prior to maturity 12 223.6 18.5 13 994.6 19.5 14.5
Profit shares distributed1) 7 877.2 11.9 8 247.4 11.5 4.7
Total benefits paid to policyholders 66 161.2 100.0 71 827.6 100.0 8.6
1) profit shares distributed, maturity bonuses, supplementary death benefits and similar elements of benefits, unless already included in the headings mentioned above, for
instance, when using profit shares to increase the insured amount – Source: GDV.

Gross premiums written by Pensionskassen, About 72 billion EUR in benefit payouts

not including premiums from bonus and re- Life assurers and Pensionskassen paid a total
bate provisions, came out to 2.83 billion EUR of 72.1 (2007: 66.4) billion EUR in benefits to
(2007: 2.82 billion EUR), an increase of 0.3 per policyholders and surviving dependants in
cent. 2008, 8.6 per cent higher than the year before.

Pensions funds were not able to contribute to
the growth in premium revenues. Total new
business for 2008 came to 25 600 insured per-
sons (– 54 per cent). Periodic premiums for
one year from new business came to 14 mil­
lion EUR (– 15 per cent) and single premiums
to 349 million EUR (– 44 per cent). As of the
end of the year, the portfolio totalled about
262 200 persons (+ 10 per cent). Gross pre­
miums written in the same period amounted
to 454 million EUR (– 36 per cent).
Of this figure, 71.8 billion EUR was for life
­ ssurance in the narrow sense. For most policy­
a
holders, life assurance represents “endow-
ment insurance”: among the endowment ben­
efits of 41.8 (2007: 38.9) billion EUR, benefits
upon expiration or endowment predominated,
with 38.0 (2007: 35.2) billion EUR. Benefits for
surviving dependants in the event of death
came to 3.7 (2007: 3.6) billion EUR, slightly
96 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Expense ratio in life assurance in “early benefits” was paid out (+ 14.5 per
(without Pensionskassen and pension funds) cent). Bankruptcy and unemployment, as well
Current administrative expenses of life assurers as divorce, are the main causes of surrender.
Year current expenses as %
of gross
EUR bn premiums written Total benefit obligations to policyholders
1980 0.918 7.0 reached 707.8 billion EUR at the end of 2008.
1985 1.115 6.1 Life assurers place their available funds in long-
1990 1.479 5.4 term capital market investments in order to
1995 1.875 4.2 ­ensure that they will be able to meet their obli-
2000 2.143 3.5
gations. These investments and the income
2001 2.190 3.5
they generate are the bedrock of the industry’s
2002 2.267 3.5
2003 2.275 3.4 ability to satisfy policyholder benefit claims,
2004 2.243 3.3 now and in the future.
2005 2.305 3.2
2006 2.272 3.0 Net bonus and rebate provisions fell by 4.0 bil-
2007 2.222 2.9 lion EUR in 2008 (i.e. withdrawals exceeded
2008 2.157 2.8
allocations) after increasing by 3.8 billion EUR
the year before. This demonstrates the func-
tion of these provisions as a “buffer”: they
higher than the year before, and their share in ­ensure very stable performance by policy­
total payouts was 5.2 per cent. Payouts due to holder capital throughout the term of the
disability and other events came to 0.1 billion ­policy despite capital market fluctuations. In
EUR (2007: 0.1 billion EUR). times when the capital markets are weak,
funds are withdrawn from bonus and rebate
Annuity benefits from primary and supple- provisions, and when the markets recover, the
mentary insurance contracts increased once provisions are replenished.
again, with the payout volume reaching 6.6
(2007: 6.3) billion EUR. Annuity benefits from Pension share of 28.5 per cent
primary policies increased by a good 5.3 per The significance of life assurance as a com­
cent, to 4.8 billion EUR, and annuities from ponent of assurance for old age, disability and
supplementary policies increased by 6.6 per surviving dependants has been increasing
cent, to 1.8 billion EUR. steadily over the years. A comparison of life
assurance benefit payouts (not including sur-
Profit share payouts, e.g. from interest-­bearing renders) with the expenditures of govern-
accumulation and maturity bonuses, came to ment Pensionskassen for workers’ and em­
8.2 billion EUR (+ 4.7 per cent). 14.0 billion EUR ployees’ pension insurance makes this clear.
While the payouts of all life assurers amounted
to about 17 per cent of pension expenditures
in 1990, this ratio had increased to 28.5 per
 2009 YEARBOOK 97

cent by 2008. Government pension expendi­ Number of persons with private health insurance
tures (German pension insurance, not in­ Number of persons (double counts possible),
cluding railway, mining and maritime em­ as per the end of the respective year
ployees) were around 203 billion EUR in 2008. 2006 2007 2008
Persons with full cover 8 489 100 8 549 000 8 639 300
Administrative expense ratio drops to with optional hospital benefits 7 206 300 7 214 900 7 217 600
with daily disability benefits 2 035 700 2 029 400 2 028 500
2.8 per cent
Long-term care insurance 9 276 800 9 320 000 9 352 400
At 2.16 billion EUR, administrative expenses Supplementary insurances 18 400 500 20 009 400 20 983 200
in 2008 were slightly lower than those of the tariffs for insured individuals covered by
previous year (2.22 billion EUR), or 2.8 (2007: the state health insurance 12 999 500 14 381 600 15 394 100
2.9) per cent of gross premiums written. In tariffs for out-patient treatment 5 892 400 6 347 100 6 627 800
tariffs for optional benefits in hospital 5 096 500 5 167 600 5 382 700
1980, the administrative expense ratio was
Tariffs for dental treatment 9 376 300 10 794 300 11 769 700
about 7 per cent. Daily benefits in the event of sickness 3 337 000 3 371 300 3 404 000
Daily benefits in the event of hospitalization 8 743 800 8 648 100 8 545 700
Contracting expenditures increased from 8.1 Supplementary long-term care insurance 988 800 1 174 000 1 316 200
billion EUR in 2007 to 8.3 billion EUR in 2008. Foreign travel health insurance 21 135 600 22 512 900 23 762 900
The contracting cost ratio, i.e. total contract­ Special segmental insurances
(Ausschnittsversicherungen) 8 076 800 8 465 600 9 980 800
ing costs as a percentage of total new busi-
ness premium revenues, was 4.9 per cent,
below the previous year’s level of 5.2 per cent.
Private health insurance
Rising investments
The investment portfolio of life assurers in­ The total number of persons with full health
creased by 0.6 per cent in 2008, according to insurance coverage was 8.74 million on 30 June
GDV’s data, to 685.6 (2007: 681.6) billion EUR 2009. Net new business in the first half of
(not including deposit claims). This figure 2009 was 98 800 persons, much higher than
does not include 31.5 billion (year before: 41.2 the year before (first half of 2008: 23 400 per-
billion) EUR in investments for the account sons). A major reason for this jump is the
and at the risk of life assurance policyholders. ­general insurance requirement which took ef-
These investments by life assurance compa- fect in Germany on 1 January 2009. Thousands
nies are the guarantor for present and future of formerly uninsured persons concluded
policyholder benefit claims, whose volume is ­private health and long-term care insurance
primarily determined through the investment contracts in 2009. The industry has also great­
of funds stemming from premium revenue. ly increased its marketing efforts in order to
Year for year, life assurance thus provides compensate for the negative consequences of
funds to the capital markets which are needed the health care reform.
for long-term investments by the government
and businesses.
98 2009 YEARBOOK INSURANCE CLASSES AND TYPES
Nevertheless, statutory changes continue to
have a negative impact on new business, in­
cluding the extraordinary increase in the com-
pulsory insurance limit in 2003 and the adop­
tion of a 3-year waiting period before em­
ployees above the compulsory insurance limit
can switch to private health insurance.
The number of supplementary policies con­
tinues to increase. Until mid-year, about
153 000 new supplementary contracts had
been concluded, bringing the total number of
contracts to 21.1 million (30 June 2008: 20.5
million). While the growth in the number of
contracts was less than the year before, when
about 488 000 new contracts were concluded,
this is attributable to the weak economy. The
total number of contracts is increasing in ­spite
of this fact, in what appears to be a continued
reaction to the cuts in statutory health insur­
ance benefits.
Private health insurers expect premium re­­v­
enues to total 31.5 billion EUR in 2009 (+ 4.0
per cent), including 29.4 billion EUR from health
insurance (+ 3.8 per cent) and 2.1 billion EUR
from long-term care insurance (+ 6.6 per cent).
In the first half of 2009, premium revenues
came to around 15.8 billion EUR, of which
about 11.3 billion EUR was from full health
­insurance and about 1.1 billion EUR from pri-
vate long-term care insurance. The premium
volume in daily hospitalisation ben­efits insu-
rance was 510 million EUR in the first half of
the year, and the premium volume in supple-
mentary SHI coverage (elective benefit rates,
outpatient rates and dental rates) was about
2.1 billion EUR.
Insurance benefit payouts (including claims
settlement costs) should reach 21.4 billion EUR
until the end of 2009, including 20.7 bil­lion
EUR in health insurance (+ 6.0 per cent) and
0.7 billion EUR in long-term care insur­ance
(+ 6.7 per cent). Insured persons received
about 10.7 billion EUR in insurance benefits in
the first half of 2009, of which about 10.4 bil-
lion EUR was for health insurance and around
0.3 billion EUR for long-term care insurance.
A look back at 2008
Premium revenues in private health and long-
term care insurance increased by 2.95 (2007:
3.44) per cent in 2008, to 30.3 billion EUR. The
2.8 per cent increase in health insurance pre-
mium revenue, to 28.4 billion EUR (including
ancillary benefits, but not including single
premiums from bonus and rebate provisions),
is attributable both to the increase in persons
with basic health coverage and to premium
adjustments. The rate of increase was lower
than that of the previous year (3.6 per cent).
Revenues in long-term care insurance, on the
other hand, increased at a rate of 4.6 per cent,
much higher than the year before (2007: 0.6
per cent), to about 2 billion EUR.
The percentage of full insurance coverage in
total premium revenue was nearly un-
changed, at 72 per cent, while supplementary
coverage accounted for just 19.5 per cent. If
one includes only supplementary coverage
obtained by SHI customers, this figure would
be just 13 per cent. Remaining premium re­v­
enue was divided among long-term care
insur­ance (6.5 per cent) and special insurance
classes (2.2 per cent), such as state aid and
­foreign travel health insurance.
 2009 YEARBOOK 99

Relief in old age

Development of the number of

fully insured persons in private
health insurance and provision
for increasing age

Fully insured persons Provision for increasing age

in millions in billions of EUR

1996 6.9 33.3

1997 7.1 38.7

1998 7.2 44.6

1999 7.4 52.1

2000 7.5 59.6

2001 7.7 68.2

2002 7.9 76.3

2003 8.1 85.1

2004 8.3 93.8

2005 8.4 103.4

2006 8.5 113.4

2007 8.5 123.6

2008 8.6 134.4

0 10 million 0 25 50 75 100 125 150 bn

© GDV-Jahrbuch 2009
100 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Switching health insurance provider s­ ometime in the future. After adjusting for
Number of persons switching between private health insurance and this extraordinary one-time effect, 2008 net
statutory health insurance new business came to 69 800 persons, of
Year defections number returning difference which 20 900 were formerly uninsured and
to private to statutory health
health insurers insurance obtained insurance in order to comply with
in 1000 in 1000 in 1000 the statutory insurance requirement as of 1
1970 130 226 – 96 January 2009. Accordingly, “normal” net new
1975 170 152 18
business in 2008 was 48 900 persons, which is
1980 217 109 108
comparable to new business in previous years.
1985 243 98 145
1990 310 112 198 Of the 8.64 million persons with basic cover­
1995 271 186 85 age, 7.2 million obtained coverage for the
1996 247 181 66 elective benefits of a one- or two-bed hospital
1997 316 144 172 room and treatment from the hospital chief
1998 328 155 173 of staff, a number which has remained nearly
1999 325 149 176
unchanged from the year before. 9.35 million
2000 325 149 176
persons (2007: 9.32 million) had long-term
2001 361 148 213
2002 362 130 232 care insurance as of the end of the year.
2003 338 130 208
2004 298 131 167 In 2008, there were about 21 million persons
2005 275 154 121 with private supplementary coverage. Since
2006 285 144 141 2005, rates which can be obtained by statu­
2007 234 155 79
tory insurance customers to supplement their
2008 245 151 94
statutory coverage are counted separately.
Source: Association of Private Health Insurers.
There was strong growth in this area in 2008:
15.4 million were counted in this category at
the end of the year, more than a million higher
Net new business in basic health insurance than the year before. This increase was attribut­
reached 90 300 persons in 2008, more than able above all to the growth in supplementary
150 per cent higher than the year before dental coverage, where the number of policies
(2007: 59 000 persons), but still lower than in increased by over 975 000, to 11.8 million
the years prior to the health care reform (+ 9.0 per cent). The number of contracts with
(2006: 116 000 persons). It must also be kept supplementary coverage for elective hospitali­
in mind that this number includes 20 500 per- sation benefits increased by 4.2 per cent, to
sons with insurance for reinstatement of 5.4 million. The number of supplementary
­coverage, persons with statutory insurance outpatient policies increased to 6.6 million
who want to secure an “old world” rate for (+ 4.4 per cent). The growth in daily benefits
insurance was weaker, as the number of
­policies increased by about 1 per cent, to 3.4
mil­lion. However, the number of daily hospitali­
 2009 YEARBOOK 101

Premium income in private health insurance

Premium income by type of insurance in EUR bn and shares as per cent
Type of insurance 2005 2006 2007 2008
EUR bn % EUR bn % EUR bn % EUR bn %
Full health insurance coverage1) 19.665 71.9 20.510 72.0 21.209 72.0 21.790 71.8
Long-term care insurance 1.868 6.8 1.871 6.6 1.883 6.4 1.970 6.5
Additional insurance to supplement
statutory health cover2) 3.284 12.0 3.520 12.4 3.724 12.6 3.931 13.0
Daily benefits insurance3) 1.047 3.8 1.042 3.7 1.040 3.5 1.001 3.3
Daily benefits in the event of hospitalization 0.751 2.7 0.727 2.5 0.699 2.4 0.645 2.1
Supplementary long-term care insurance 0.170 0.6 0.205 0.7 0.260 0.9 0.322 1.1
Special types of insurance4) 0.562 2.1 0.608 2.1 0.646 2.2 0.672 2.2
Total for private health insurance 26.413 100.0 27.347 100.0 29.461 100.0 30.331 100.0
1) full cover, 2) supplementary insurance for hospital treatment, supplementary benefits, etc., 3) loss of earnings insurance, 4) foreign travel health insurance, special segmental
insurance (not separately registered until 2005), insurance effected as a substitute for the state aid scheme, residual debt insurance and salary continuation insurance.

Breakdown of total expenditure in private health insurance

sation benefits policies decreased, falling by From 1995 including compulsory long-term care (gross amount)
1.2 per cent, or 102 400 policies, to 8.55 mil­ Year expenditure expenditure allocations to total
lion. The growth in supplementary long-term on on bonus and the provision expenditure3)
claims1) rebate for increasing
care insurance has been particularly strong in provisions2) age
recent years: the number of these policies, EUR bn EUR bn EUR bn EUR bn
which are appropriate for statutory and pri­ 1980 3.681 0.277 0.608 4.567
vate insurance customers alike, increased by 1985 4.835 0.846 1.025 6.706
12.1 per cent (or 142 200), to 1.3 million. 1990 7.324 0.584 1.595 9.503
1995 10.981 2.038 3.785 16.804
2000 13.815 2.861 7.410 24.087
In addition to basic and supplementary cover­ 2002 15.449 1.660 8.082 25.191
age, there are special forms of coverage. 23.8 2003 16.041 2.381 8.824 27.246
million people had foreign travel health insur­ 2004 16.655 3.234 8.673 28.562
ance coverage in 2008, representing a strong 2005 17.451 3.444 9.559 30.455
5.6 per cent growth over the year before, or 2006 17.839 3.662 10.062 31.758
2007 18.898 3.686 10.213 33.006
1.3 mil­lion. Specialized individual insurance
2008 20.169 2.493 10.734 33.648
covers a specific risk, such as if the insured
1) including claim settlement expenditure and allocations to the provision for claims, 2) allocations to
person needs glasses or emergency medical bonus and rebate provisions, 3) German direct business; values delimited by periods.
evacu­ation from abroad. Premiums are calcu-
lated under special terms and conditions,
which is why this insurance class does not Cost increases
qualify as supplementary coverage. Almost 10 The rise in private health insurance ex­
million persons chose this coverage until the penditures in 2008 was as high as in the year
end of 2008, for an extraordinarily strong gain before, 6.7 per cent (2007: 6.05 per cent). Total
of 17.9 per cent, or 1.5 million policies. benefits reached 19.55 (2007: 18.32) billion
102 2009 YEARBOOK INSURANCE CLASSES AND TYPES
EUR. Expenditures in long-term care insur­
ance also rose sharply in 2008, by 6.85 per
cent (2007: 2.54 per cent), to 617.7 million EUR.
The change per insured person in each indi­
vidual benefit category was as follows:
Outpatient benefits + 4.52 per cent
thereof
Medical treatment + 2.56 per cent
Alternative medicine + 4.36 per cent
Medications and
dressings + 7.64 per cent
Remedies + 7.12 per cent
Aids + 5.79 per cent
Hospitalisation benefits + 3.81 per cent
thereof
General hospitalisation
benefits + 5.80 per cent
Elective: chief of staff + 3.60 per cent
Elective: accommodations – 3.80 per cent
Alternative daily
benefits – 4.21 Prozent
Dental benefits + 5.89 per cent
thereof
Dental treatment + 4.15 per cent
Tooth replacement + 7.67 per cent
Orthodontics + 1.99 per cent
Total benefits for
medical costs + 5.83 per cent
The increase in expenditures per insured per-
son in 2008 was much higher than in the year
before (2007: + 5.37 per cent). While the rate
of increase in expenditures fell to 4.52 per
cent for outpatient care (2007: + 6.58 per
cent) and 5.89 per cent for dental benefits
(2007: + 7.48 per cent), the increase in the cost
of hospitalisation benefits was 3.81 per cent
higher than in the year before (2007: + 2.34
per cent). This is mainly due to the 5.80 per
cent increase in general hospitalisation bene-
fits (2007: + 2.44 per cent). Expenditures for
medications and dressings (2007: + 7.72 per
cent), aids (2007: + 5.87 per cent) and tooth
replacement benefits (2007: + 10.18 per cent)
once again in­creased at a faster pace than the
year before, while growth in alternative medi-
cine benefits slowed considerably, to 4.36 per
cent (2007: + 11.30 per cent). Expenditures
decreased for elective accommodation and
­alternative daily hospitalisation benefits.
Premium refunds and total expenditures
Insured persons with no benefit payouts in
2008 received premium refunds in the amount
of 1.16 billion (2007: 1.04 billion) EUR. The
sums mitigating premium adjustments in
health insurance amounted to 2.34 billion
EUR (2007: 1.34 billion EUR). Total expendi­
tures for insured persons increased in long-
term care and health insurance by around 1.9
per cent, to 33.6 billion EUR. Total expendi­
tures encompass insurance benefits payouts,
including claim settlement expenditures,
changes in provisions for claims, the alloca-
tion to the bonus and rebate provisions and
allocations to the provision for increasing age.
 2009 YEARBOOK 103

Casualty, property and Claims in casualty, property and accident insurance1)

accident insurance Insurance classes 1980 1990 2000 2007 2008
millions millions millions millions millions
While casualty, property and accident insurers Motor 6.61 8.54 9.12 9.03 9.24
posted improved results in 2008, the business Liability, accident, legal expenses 5.60 7.14 8.14 7.69 7.65
outlook for the current year has darkened Property insurances2) 4.84 7.16 5.80 7.05 5.42
Private 3.28 5.56 4.12 5.47 4.03
noticeably, e.g. in light of the economic crisis.
plate glass 0.27 0.76 0.71 0.55 0.51
The market-wide combined ratio (claims ex-
comprehensive insurance on contents 0.62 3.02 1.87 3.59 2.32
pense ratio after settlement) should increase comprehensive insurance on buildings 2.39 1.61 1.54 1.33 1.20
by two per cent over the year before, to around Non-private 1.54 1.59 1.69 1.58 1.39
97 per cent, which would decrease net actu­ industrial: property3) 0.60 0.09 0.12 0.21 0.18
arial profit by 1.2 billion EUR in 2009, to about engineering classes, incl. BI 0.52 0.46 0.62 0.40 0.40
1.6 billion EUR. commercial4) 0.33 0.63 0.73 0.84 0.66
agricultural ° 0.41 0.21 0.13 0.15
Total1) 17.09 22.96 23.37 24.34 22.89
This development is partly attributable to the
1) domestic direct business of GDV member companies, not including radiation and nuclear power
fact that premium revenues will be stagnant plant, aircraft and spacecraft liability, pecuniary liability, carrier’s liability, aviation accident, credit,
in 2009 for the second year in a row, rising by ­suretyship, fidelity and marine (goods, comprehensive cover, luggage insurance, etc.) insurance, 2) until
1995: including claims from co-insurance business; beginning 1996: only claims from exclusive and
0.2 per cent to 54.7 billion EUR. The only line lead insurer business, 3) includes industrial fire, fire business interruption, EC and all-risks (as well as
where premium revenues are expected to de- fire liability insurance, which was included in industrial from 1988 to 1995, and not listed separately
here), 4) includes commercial fire/other, burglary, water damage, storm, natural forces, ­omnium, BI/
cline is motor insurance, but motor insurance other and “unspecified,” “other property insurance classes” and combined commercial insurance
­classes.
is the most important line in casualty, proper-
ty and accident insurance with respect to
­premium revenues. In addition, premium
­revenues are expected to increase only slight- ment in legal expenses, marine, credit, surety-
ly or not at all in all other casualty, property ship and fidelity insurance. Expenditures in
and accident insurance lines as well. Only in these three lines will be much higher than the
property insurance is strong growth in pre­ year before as a result of the economic crisis.
mium revenues expected, by 2.1 per cent, but
this gain is almost entirely attributable to in-
flation-related adjustments. Motor insurance

In addition to the premium revenue trend, the Motor insurance premium revenues should
expected decline in actuarial profits in casualty, continue to drop in 2009, for the fifth year in a
property and accident insurance can also be row. After falling by 2.1 per cent in 2008, pre-
attributed to the noticeable increase in claims mium revenues are expected to decline at a
expenditures. Claims expenditures are expect­
ed to increase by 1.7 per cent, to around 42.6
billion EUR, largely as a result of the develop-
104 2009 YEARBOOK INSURANCE CLASSES AND TYPES

slower rate in 2009, based on the first half
data, but should still fall by 1.5 per cent, to
around 20.1 billion EUR. There will be no
growth in premium revenues this year, as in
the year before, because average rates are ex-
pected to fall once again, while the number of
contracts increases only slightly, by 1.2 per
cent.
The individual motor insurance lines will be
affected differently in 2009 by the scrappage
scheme which expired in September, but
­these effects will cancel each other out. Al­
though the competitive situation in motor in-
surance should remain generally unchanged,
the downtrend in premium revenues in motor
liability insurance should be exacerbated by
the switch to lower rates associated with the
scrappage scheme, which benefits sales of
smaller vehicles in particular. As a result, pre-
mium revenues in the largest motor insur­
ance line are expected to fall by 2.5 per cent,
to around 12.2 billion EUR.
In the comprehensive cover lines, the pre­
mium revenue trend will be affected by the
state of the economy, as well as the scrappage
scheme. The number of newly registered pri-
vately used passenger vehicles more than
doubled in the first nine months of 2009, but
new registrations of commercial vehicles fell
by about 25 per cent over the same period.
While premium revenues in full comprehen­
sive cover should increase by about 1.5 per
cent, to about 6.4 billion EUR, with the num-
ber of contracts expected to grow by 5.0 per
cent, premium revenues in semi-com­
prehensive cover insurance should fall by 5.0
per cent, to about 1.4 billion EUR, as govern-
ment incentives are reinforcing the continu-
ing trend from semi-comprehensive to full
comprehensive cover.

Premium income and claims expenditure in motor insurance1)

Insurance class 1990 2000 2005 2006 2007 2008
change change change change
against against against against
EUR EUR EUR previous EUR previous EUR previous EUR previous
m m m year as % m year as % m year as % m year as %
Premium income total2) 14 346 20 358 22 005 – 2.2 21 221 – 3.6 20 800 – 2.0 20 372 – 2.1
motor TPL 9 371 12 628 13 581 – 2.4 13 098 – 3.6 12 805 – 2.2 12 495 – 2.4
full comprehensive cover 3 528 5 748 6 582 – 1.9 6 375 – 3.2 6 303 – 1.1 6 260 – 0.7
semi-comprehensive cover 1 047 1 740 1 686 – 2.0 1 603 – 4.9 1 562 – 2.6 1 495 – 4.2
passenger accident 400 242 156 – 5.5 146 – 6.4 131 – 9.9 121 – 7.7
Claims expenditure total3) 12 847 20 355 18 953 – 1.4 18 789 – 0.9 19 094 1.6 19 561 2.4
1) domestic direct business of GDV member companies, 2) gross premiums written, without insurance premium tax, 3) gross claims expenditures in financial year.
 2009 YEARBOOK 105

Claims expenditures should fall sharply, by 2.5 Loss ratios in motor insurance
per cent in full comprehensive cover, to 6.0 bil- Year Loss ratio1) as per cent
lion EUR, and by 13.5 per cent in semi-com- motor liability full comprehenisve semi-comprehensive
cover cover
prehensive cover, to 1.1 billion EUR, due to the
1980 99.2 94.2 79.7
fact that 2008 claims expenditures were
1985 95.0 86.6 80.2
extra­ordinarily high in both lines due to hail 1990 93.5 92.7 90.0
events at the end of the first half of the year. 1995 96.7 75.6 68.7
Given the long-term claims trend in motor 1999 115.8 94.9 72.3
­liability insurance, claims expenditures can be 2000 108.4 93.3 70.0
expected to increase slightly, by 0.5 per cent, 2001 102.5 87.7 66.1
2002 97.0 89.6 78.8
to 12.2 billion EUR. Taken together, claims ex-
2003 93.0 83.5 68.7
penditures in motor insurance should amount
2004 91.9 79.4 63.2
to about 19.3 billion EUR in 2009, down 1.3 2005 92.6 80.7 61.7
per cent from 2008. 2006 94.0 84.7 63.9
2007 96.9 88.9 67.9
The expected declines in claims expenditures 2008 97.3 98.3 81.2
for full and semi-comprehensive cover should 1) domestic direct business of GDV member companies, gross claims expenditures in the business year
in proportion to gross premiums earned.
lead to noticeable improvement in the com-
bined ratio, by about four to six per cent, but
in full comprehensive cover at least, the drop Road accidents in Germany
in claims expenditures will not be enough to 2007 2008 change
as %
generate net actuarial profit. In view of the
Accidents recorded by the police 2 335 005 2 293 663 – 1.8
decline in premium revenues, motor liability
Accidents involving bodily injury 335 845 320 614 – 4.5
insurance is expected to finish 2009 with a Accidents involving material damage 1 999 160 1 973 049 – 1.3
negative actuarial result, assuming a normal­i­ serious accidents involving material damage 97 278 91 144 – 6.3
sation in the settlement result and no change other accidents involving alcohol1) 18 725 18 205 – 2.8
in the cost trend. Accordingly, motor liability other accidents involving material damage 1 883 157 1 863 700 – 1.0
insurance will be unable to make up for the Total number of persons involved 436 368 413 524 – 5.2
killed 4 949 4 477 – 9.5
actuarial losses in the comprehensive cover
injured 431 419 409 047 – 5.2
­lines in 2009, as was the case at least in part
1) accidents in which at least one party was intoxicated – Source: Federal Statistical Office.
in 2008, and motor insurance as a whole will
once again be in the red. With an expected
combined ratio of 103 per cent, the actuarial
loss in 2009 will reach 600 million EUR, con­
siderably higher than in the year before (2008:
net actuarial loss of 300 million EUR).
106 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Motor liability insurance, in figures1)

Year of vehicles2) number of claims claims expenditure3) loss frequency4) average loss5)
notifi­
1000 1000 EUR m EUR
cation
total6) thereof total thereof total thereof total thereof total thereof
motor cars motor cars motor cars motor cars motor cars
1980 26 964 19 980 3 331 2 505 5 499 4 377 124 125 1 651 1 747
1990 34 368 26 851 3 756 2 903 8 362 6 772 109 108 2 226 2 333
1993 45 246 34 619 4 412 3 432 11 734 9 425 98 99 2 659 2 746
1995 46 794 35 382 4 256 3 270 12 816 10 162 91 92 3 011 3 108
1999 49 683 36 767 4 199 3 177 13 655 10 625 85 86 3 252 3 345
2000 50 634 37 372 3 974 3 000 13 261 10 317 78 80 3 337 3 439
2001 51 143 37 698 3 819 2 918 13 016 10 232 75 77 3 408 3 507
2002 51 620 37 986 3 740 2 882 12 716 10 051 72 76 3 400 3 488
2003 52 301 38 558 3 634 2 828 12 465 9 886 69 73 3 430 3 496
2004 52 641 38 782 3 552 2 771 12 322 9 750 67 71 3 469 3 518
2005 52 960 38 865 3 449 2 686 12 133 9 575 65 69 3 518 3 564
2006 53 618 39 203 3 392 2 637 11 791 9 298 63 67 3 476 3 526
2007 54 313 39 504 3 368 2 623 11 930 9 400 62 66 3 542 3 583
2008 54 819 39 688 3 297 2 565 11 727 9 219 60 65 3 557 3 594
1) from 1993 for Eastern and Western Germany; deviations from the Statistical Yearbook due to different reporting systems of underlying statistics; here: based on the
­reporting year, motor trade and craft, border insurance and NATO business not included; Stat. Yearbook: based on the financial year, complete motor business included,
2) units per year: contracts of less than one year have been aggregated, 3) gross expenditure on reported claims incl. claim settlement expenses, 4) number of claims per 1000
vehicles, 5) claims expenditure divided by number of claims, 6) motor cars, lorries, motorcycles, mopeds, etc.

How long without an accident? A look back at 2008

Share in per cent of motor car drivers in the no-claims classes of
motor liability insurance Motor insurance premium revenues in 2008
followed a similar trend to the one followed in
Claim-free years 2004 2005 2006 2007 2008
  1 or less 6.1 6.1 7.2 7.8 7.5
2007. Since the competitive situation is nearly
 2 3.6 3.3 2.9 3.0 2.8 unchanged, average premiums in all three
 3 3.9 3.7 3.3 3.1 3.0 motor insurance lines have fallen consider­
 4 4.2 4.0 3.8 3.6 3.4 ably once again. With only slight growth in
 5 4.4 4.2 3.9 3.8 3.7 the number of contracts, premium revenues
 6 4.4 4.4 4.1 3.9 3.8
therefore fell sharply once again, by 2.1 per
 7 4.3 4.2 4.1 3.9 3.8
cent, to 20.4 billion EUR. The smallest drop in
 8 4.0 4.0 3.9 3.8 3.7
 9 3.9 3.8 3.8 3.7 3.7 premium revenues was in full comprehensive
10 3.9 4.0 3.8 3.8 3.8 cover, where revenues fell by just 0.7 per cent,
11 3.9 3.8 3.8 3.8 3.8 to 6.3 billion EUR. The reason for this relatively
12 3.4 3.6 3.5 3.5 3.4 strong performance was noticeable portfolio
13 3.2 3.2 3.3 3.2 3.3 growth, as in 2007, with the number of con-
14 3.3 3.0 3.0 3.1 3.1
15 3.1 3.1 2.8 2.8 2.9
16 3.1 3.0 2.9 2.7 2.7
17 2.9 3.0 2.8 2.8 2.6
18 or more 34.4 35.7 36.9 37.8 39.1
 2009 YEARBOOK 107

tracts rising by 2.5 per cent, a development Theft of insured motor vehicles by number and claims expenditure
which is attributable to the continuing shift Number of claims and claims expenditure of total thefts of motor vehicles
from semi-comprehensive to full comprehen- with comprehensive motor insurance1)
sive cover. Mean­while, 2008 premium volume Year of number of claims claims expenditure in EUR m
notification all motor thereof all motor thereof
fell even more sharply than in the year before
vehicles motor cars vehicles motor cars
in both motor liability insurance (– 2.4 per
1985 60 984 34 511 197 153
cent, to 12.5 billion EUR) and semi-compre- 1990 53 705 40 079 312 261
hensive ­cover (– 4.2 per cent, to 1.5 billion 1995 111 272 89 072 686 587
EUR). 2000 65 784 42 560 429 316
2001 61 062 37 549 418 308
In the comprehensive cover lines, the decline 2002 58 764 34 775 416 301
2003 55 767 31 707 411 293
in premium revenues was exacerbated by a
2004 52 980 28 674 403 284
considerable increase in claims expenditures, 2005 46 562 23 771 370 253
due in particular to the hail events in the first 2006 41 632 18 965 318 211
half of the year: claims expenditures increas­ed 2007 38 813 16 502 275 178
by 9.9 per cent in full comprehensive cover, to 2008 37 621 16 134 272 176
6.2 billion EUR, and by 14.4 per cent in semi- 1) from 1995 for Eastern and Western Germany.
comprehensive cover, to 1.2 billion EUR. The
premium revenue and claims trend in both
Theft of insured motor cars by manufacturer
comprehensive cover lines have resulted in Comparison of total thefts in 2008
heavy actuarial losses. In fact, the last time
Make/manufacturer number of claims claims average
the combined losses of these motor insurance in absolute change frequency2) claim3)
lines were this high was in 1993. But even figures against
previous
with­out the extraordinary expenses due to year as % EUR
the hail events, which cost around 500 million Volkswagen-VW 5 921 4.8 0.9 9 888
EUR, the comprehensive cover lines would still Audi AG 1 992 – 4.2 0.9 11 868
have closed 2008 with a net actuarial loss of BMW (incl. Mini) 1 803 – 4.0 0.8 19 625
about 350 million EUR. Mercedes-Benz 1 198 – 19.1 0.4 12 777
Opel 936 – 10.9 0.2 3 529
Ford/Europe 741 – 3.0 0.3 4 506
A positive claims trend was recorded in 2008
Skoda 493 35.8 0.6 9 709
in motor liability insurance, as claims expendi­ Renault1) 410 – 4.4 0.2 5 259
tures fell by 2.0 per cent, to 12.2 billion EUR. Fiat (incl. Alfa Romeo, Lancia) 321 – 1.8 0.3 3 758
That motor liability insurers were able to re- Seat 282 12.8 0.5 9 108
port a positive actuarial result despite the fact Toyota (incl. Lexus) 260 – 10.3 0.2 12 598
that premium revenues fell by 2.4 per cent in Peugeot 197 – 9.6 0.2 5 391
Nissan 174 6.1 0.3 5 141
Porsche 162 – 1.2 1.5 49 301
Mazda Motor Corporation 143 – 33.8 0.2 7 098
Citroën 103 – 12.0 0.2 5 703
Mitsubishi1) 93 – 26.2 0.2 6 789
Chrysler 91 11.0 0.6 12 254
Volvo 88 – 2.2 0.2 10 235
Honda Motor 86 – 23.2 0.2 5 094
1) The data for the manufacturer Renault from 2003 also includes vehicles of the manufacturer Matra,
the data for Mitsubishi from 2003 includes vehicles of the manufacturer Hyundai Precision, 2) number
per 1000 insured passenger cars, 3) claims expenditure divided by number of claims.
108 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Full comprehensive cover, in figures1)

Year of vehicles2) number of claims claims expenditure3) loss frequency4) average loss5)
notifi­
1000 1000 EUR m EUR
cation
total6) thereof total thereof total thereof total thereof total thereof
motor cars motor cars motor cars motor cars motor cars
1980 5 276 ° 1 307 ° 1 184 ° 248 ° 906 °
1990 10 428 ° 2 374 ° 3 029 ° 228 ° 1 276 °
1993 15 570 ° 3 501 ° 5 438 ° 225 ° 1 553 °
1995 14 834 13 392 2 944 2 632 4 601 3 944 199 197 1 563 1 498
1999 18 125 16 416 2 984 2 643 4 918 4 122 165 161 1 648 1 559
2000 19 216 17 344 3 086 2 713 5 029 4 199 161 156 1 629 1 548
2001 19 831 17 879 3 042 2 668 5 045 4 227 153 149 1 658 1 584
2002 20 396 18 413 3 343 2 963 5 436 4 597 164 161 1 626 1 551
2003 20 871 18 945 3 268 2 923 5 223 4 470 157 154 1 598 1 529
2004 21 116 19 178 3 218 2 889 5 045 4 328 152 151 1 568 1 498
2005 21 347 19 371 3 238 2 909 4 996 4 270 152 150 1 543 1 468
2006 21 960 19 898 3 348 3 009 5 078 4 340 152 151 1 517 1 442
2007 22 477 20 328 3 590 3 223 5 307 4 538 160 159 1 478 1 408
2008 23 044 20 762 3 828 3 427 5 844 5 000 166 165 1 527 1 459
1) from 1993 for Eastern and Western Germany; deviations from the Statistical Yearbook due to different reporting systems of underlying statistics; here: based on the
­reporting year, motor trade and craft, border insurance and NATO business not included; Stat. Yearbook: based on the financial year, complete motor business included,
2) units per year: contracts of less than one year have been aggregated, 3) gross expenditure on reported claims incl. claim settlement expenses, 4) number of claims per 1000
vehicles, 5) claims expenditure divided by number of claims, 6) motor cars, lorries, motorcycles, mopeds, etc.

Semi-comprehensive cover, in figures1)

Year of vehicles2) number of claims claims expenditure3) loss frequency4) average loss5)
notifi­
1000 1000 EUR m EUR
cation
total6) thereof total thereof total thereof total thereof total thereof
motor cars motor cars motor cars motor cars motor cars
1980 18 164 ° 1 773 ° 457 ° 98 ° 258 °
1990 18 051 ° 1 934 ° 923 ° 107 ° 477 °
1993 19 103 ° 1 949 ° 1 255 ° 102 ° 644 °
1995 20 092 15 676 1 812 1 613 1 302 1 114 90 103 722 690
1999 19 320 14 338 1 586 1 393 1 228 1 009 82 97 774 725
2000 18 979 13 957 1 523 1 333 1 182 971 80 95 776 728
2001 18 556 13 561 1 397 1 221 1 083 877 75 90 775 718
2002 18 207 13 252 1 559 1 363 1 278 1 034 86 103 820 758
2003 18 049 13 124 1 447 1 267 1 139 921 80 97 788 726
2004 17 908 12 990 1 396 1 224 1 045 840 78 94 748 686
2005 17 775 12 857 1 364 1 195 996 795 77 93 730 666
2006 17 626 12 709 1 341 1 177 974 786 76 93 726 668
2007 17 601 12 646 1 420 1 245 1 018 822 81 98 717 660
2008 17 579 12 596 1 474 1 302 1 165 951 84 103 790 730
1) from 1993 for Eastern and Western Germany; deviations from the Statistical Yearbook due to different reporting systems of underlying statistics; here: based on the
­reporting year, motor trade and craft, border insurance and NATO business not included; Stat. Yearbook: based on the financial year, complete motor business included,
2) units per year: contracts of less than one year have been aggregated, 3) gross expenditure on reported claims incl. claim settlement expenses, 4) number of claims per 1000
vehicles, 5) claims expenditure divided by number of claims, 6) motor cars, lorries, motorcycles, mopeds, etc.
 2009 YEARBOOK 109

Average costs of car accidents

Claims expenditure per car Average loss, in EUR

accident in motor liability Motor liability
insurance, full comprehensive
Full comprehensive cover
cover and semi-comprehensive
cover; as per 1995 for Germany Semi-comprehensive cover
as a whole

1990 2 333
1 214
656

1995 3 108
1 498
690

2000 3 439
1 548
728

2004 3 518
1 498
686

2005 3 564
1 468
666

2006 3 526
1 442
668

2007 3 583
1 408
660

2008 3 594
1 459
730

© GDV-Jahrbuch 2009 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000
110 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Development of the number of vehicles on the road in 10001)

Year total number thereof for information
of motor passenger lorries2) motor vehicles registrations change of
vehicles2), 3) cars2) with insurance of new ownership
plate motor vehicles (used cars)
1950 1 774 475 335 ° 513 337
1980 23 929 20 428 1 114 2 110 2 791 5 511
1990 31 547 27 028 1 211 954 3 387 7 034
2000 45 328 37 734 2 204 1 595 3 972 8 363
2005 48 112 39 968 2 243 1 786 3 832 7 454
2006 48 456 40 597 2 244 1 819 3 991 7 522
2007 48 987 41 020 2 271 1 930 3 704 7 109
2008 49 330 41 184 2 323 1 984 3 650 6 960
2009 49 603 41 321 2 347 2 194 ° °
change against previous year as %
1980 3.1 2.9 3.3 4.8 – 6.1 – 0.4
1990 3.0 3.1 3.2 – 4.8 8.1 – 2.3
2000 1.5 1.2 2.5 – 8.5 – 10.5 – 3.3
2005 0.8 0.8 – 0.5 7.4 1.5 – 0.3
2006 0.7 1.6 0.0 1.8 4.1 0.9
2007 1.1 1.0 1.2 6.1 – 7.2 – 5.5
2008 0.7 0.4 2.3 2.8 – 1.5 – 2.1
2009 0.6 0.3 1.0 10.6 ° °
average annual rate of change as %
1950–1960 14.8 23.6 5.9 ° 9.0 16.0
1960–1970 7.7 12.0 4.2 – 7.1 6.8 8.9
1970–1980 4.9 5.2 2.2 7.2 1.7 4.7
1980–1990 2.8 2.8 0.8 – 7.6 2.0 2.5
1990–2000 3.7 3.4 6.2 5.3 1.6 1.7
2000–2009 1.0 1.0 0.7 3.6 ° °
1) as registered in the Central Vehicle Register (ZFZR); until 2000 vehicles on the road as of 1 July of each year, from 2001 as of 1 January of each year; from 1991 Germany,
prior to that territory of the Federal Republic of Germany before 3 October 1990, 2) as from 1 March 2007, the system of counting was changed with the Federal Office for
Motor Traffic, all kinds of immobilization are now considered as taking out of service. For a comparable time series absolute figures for the years prior to 2008 have been
adjusted, 3) vehicles (exempt from registration) bearing an insurance plate not included (figures on that see under “for information”) – Source: Federal Office for Motor
Traffic, own calculations.

the same period is essentially attributable to responding with a net actuarial loss of around
yet another strong settlement result. In the 300 million EUR. As a result, motor insurers
end, however, the net actuarial profit in motor were in the red last year for the first time since
liability insurance was not enough to make up 2002.
for all the losses in the comprehensive cover
lines. The market-wide combined ratio in­
creased by 3.5 per cent, to 101.6 per cent, cor-
 2009 YEARBOOK 111

UDV: GDV’s accident Theft of insured motor cars by Federal State

research division Federal State number of claims claims frequency1)
2007 2008 change 2007 2008
against
GDV’s accident research division (UDV) worked previous
diligently in 2009 to address the four themes year as %
specified by the Motor Insurance Loss Preven- North Rhine-Westphalia 4 192 3 653 – 12.9 0.6 0.5
tion Commission: in addition to driver assist­ Berlin 2 065 2 223 7.7 2.5 2.6
Lower Saxony 1 593 1 522 – 4.5 0.5 0.5
ance systems, whose potential impact is cur-
Saxony 837 1 208 44.3 0.5 0.7
rently being investigated in a major UDV proj­ Brandenburg 943 1 205 27.8 1.0 1.2
ect, those themes are: motorcyclists, elderly Bavaria 1 101 1 086 – 1.4 0.2 0.2
persons in traffic and children and teenagers. Baden-Württemberg 1 005 899 – 10.5 0.2 0.2
In addition, a large number of projects were Hesse 1 077 847 – 21.4 0.4 0.3
completed, launched or continued. Hamburg 794 787 – 0.9 1.4 1.4
Schleswig-Holstein 691 698 1.0 0.6 0.6
Saxony-Anhalt 576 572 – 0.7 0.6 0.6
The potential of collision warning and
Mecklenburg-Western Pomerania 493 474 – 3.9 0.8 0.8
emergency brake systems Rhineland-Palatinate 492 349 – 29.1 0.3 0.2
Many traffic accidents are caused due to in- Thuringia 299 279 – 6.7 0.3 0.3
adequate or late braking. Car drivers are often Bremen 178 173 – 2.8 0.9 0.8
overburdened in extreme situations and are Saarland 135 116 – 14.1 0.3 0.2
unfamiliar with the physics involved in re­ Federal territory 16 502 16 134 – 2.2 0.5 0.5
ducing kinetic energy through a sudden re- 1) number per 1000 insured passenger cars.

duction in speed. State-of-the-art driver

assist­ance systems like collision warning and
emergency brake systems are proven to help
drivers and, in UDV’s view, should therefore be
installed in as many vehicles as possible as
soon as pos­sible.
In an exhaustive procedure, UDV’s accident re-
searchers determined that 13 per cent of all
serious car accidents can be prevented by
­automatic braking systems, a figure which
was reduced from the theoretical potential of
18 per cent in order to account for drivers who
fail to respond correctly. In other words, colli­
sion warning and emergency brake systems
are the types of driver assistance systems
which currently offer the highest accident
prevention potential, with the exception of
the ESP.
Study on the use of
child safety systems
In 2008, UDV conducted its third study on the
use of vehicle-mounted child safety systems.
The researchers observed how children were
secured in these systems and what errors
were made when using those systems. The
most recent “misuse study” has revealed that
60 per cent of children in car-mounted child
seats are not secured properly, confirming the
high rates of misuse found in earlier studies.
112 2009 YEARBOOK INSURANCE CLASSES AND TYPES
One positive development, however, is a de­
cline of around 60 per cent in serious errors,
i.e. errors which, in case of an accident, are
most likely to result in severe or life-threaten­
ing injuries.
The 2008 misuse study was the first to include
ISOFIX child seats, and the study reached the
very positive conclusion that these seats con-
tain no observable installation errors (in con­
trast to comparable conventionally installed
child seats). Also positive, from UDV’s perspec-
tive, was the overwhelmingly positive feed-
back for ISOFIX seats: while about one third of
respondents were not happy with the high
price, 95 per cent appreciated that the seats
were easy to use and more than two thirds
were pleased with the improved safety of the
child seats.
Tree accidents
In 2008 as well, trees were the single most
­frequent cause of fatal traffic accidents in
Germany (28 per cent). In the State of Branden­
burg, as many as 51 per cent of traffic ac­cident
fatalities died in tree-related accidents, and in
the State of Mecklenburg-Western Pomerania,
the figure was 46 per cent. Since 1995, when
the “Tree Accident Data” was introduced,
­almost 22 000 people have lost their lives in
tree accidents, including 931 in 2008.
Tests conducted by UDV in 2008 at the DEKRA
testing grounds in Neumünster showed how
terribly tree-related accidents can end, and
how little side are bags or vehicle structure
can do to mitigate the impact. The tests
­showed that even a side impact with a tree at
40 km/h could cause severe, even fatal, injuries
to the passengers. In the case of a crash at
­almost 100 km/h, an entirely realistic speed
for highway driving, the tree will usually tear
the car apart, in which case the passengers
have no chance of survival.
It is therefore important for the responsible
persons to recognize the problems and take
appropriate action, especially since car drivers
do not perceive country roads to be dan­ger­
ous. Therefore, UDV calls for
n a speed limit of 80 km/h on country roads,
with surveillance at accident hotspots;
n crash barriers at accident hotspots;
n an efficient combination of known and
effective measures; and
n no planting of new or additional trees
without crash barriers.
Shared space:
traffic safety without traffic rules?
About two years ago, there was an intensive
professional, public and political debate in
Germany about whether the “shared space”
principle (equal-opportunity use of a largely
sign-free and rule-free roadway by all traffic
participants) can serve as a forward-looking
traffic management system and promote
­safety. The findings published in the course of
shared space projects indicating a positive im-
pact on traffic safety have been unconvincing
so far, since there is generally little to no ac­
cident data recorded and since no control or
comparison groups are included. In view of
the poor experiences with mixing forms of
transportation in the past, there is a concern,

in UDV’s view, that wholesale application of
the shared space principle will have the effect
of reducing traffic safety and traffic quality,
particularly for children, seniors and persons
with limited mobility.
For this reason, UDV has argued for restric-
tions on the use of shared space planning
­methods at national and international con­
ferences and in public hearings, and has for-
mulated the following proposals:
n that shared space must be understood in
conjunction with a fundamental system
­hierarchy, intensive consideration of the
needs of all traffic participants, and only as
a niche solution of urban and traffic plan-
ning;
n that shared space zones should not be cre­
ated where motor vehicle traffic clearly
domi­nates the roadway in such a way as to
preclude equal-opportunity interaction by
all modes of transportation;
n that shared space projects must not come
at the expense of traffic safety and/or
unset­tling weaker traffic participants;
n that all shared space plans should be sub­
jected to a safety audit.
Traffic safety at
motorway construction sites
Motorways are Germany’s safest and most ef-
ficient roads: this road network, 12 531 km in
all, handles one third of Germany’s overall
traffic volume. Construction work on motor-
ways not only disrupts the flow of traffic, in
some cases significantly, causing traffic jams,
but also repeatedly results in bad accidents,
despite the use of special equipment and
speed limits to minimise the risk of accidents
2009 YEARBOOK 113
in these areas. The number of accidents with
personal injuries at motorway construction
­sites is increasing, while the number of ac­
cidents outside of construction sites has been
falling for years.
In order to define suitable measures to im­
prove traffic safety at motorway construction
sites, UDV has launched a project to “Investi-
gate Traffic Safety at Motorway Construction
Sites.” Accidents at motorway construction
­sites will be subjected to detailed analysis to
iden­tify the characteristics of construction
­sites were accidents are most likely to occur.
The study will also examine the impact of dif­
ferent traffic schemes and construction site
equipment on driving behaviour near con­
struction sites.
Pilot project for systematic
accident analysis in municipalities
The essential factor in a functional transpor-
tation system is ensuring traffic safety. But
how can this be achieved when not even the
causes for the seemingly random accident oc-
currences are known, despite all efforts on the
part of those responsible (e.g. the Accident
Commission) to reduce the frequency and se-
verity of accidents? This is the question which
confronted the City of Münster. It asked UDV
for help in investigating the context and the
causes of a bad accident problem which had
persisted for years. UDV responded by con-
ducting a pilot project in the City of Münster
in order to demonstrate the necessity and po-
tential of systematic accident analysis to
other municipalities and possibly encourage
them to do the same.
114 2009 YEARBOOK INSURANCE CLASSES AND TYPES
Through comprehensive and systematic
analy­sis of all accidents taking place between
2004 and 2006 and supplementary obser­
vations of traffic practices, UDV was able not
only to identify focal points for accidents, but
also to determine their causes and to for­
mulate proposals for action. In addition to
evaluating accident pin maps and data lists,
the study called for creating diagrams for all
places and lines with frequent accidents, in-
cluding on-site inspections and route safety
analyses for the entire network of high-volume
roads. Suitable measures to improve traffic
­safety were recommended for all areas with
frequent accidents, and city-wide strategies
and recommendations were developed, in­
cluding some of a fundamental nature which
can be applied to other cities as well.
The results of the project show that a sys­
tematic approach, with comprehensive and
detailed analysis of all accidents, is indispens­
able to identify weak points in transportation
infrastructure and erroneous traffic practices.
This is the only way to develop and implement
suitable measures and targeted strategies to
improve traffic safety. However, the pilot proj­
ect also showed the potential of investigation
by outside experts, who are in a position to in-
dependently uncover defects and recommend
appropriate action.
Effect of dialog displays
Dialog displays give drivers positive feedback
when they observe the speed limit and nega-
tive feedback when they exceed the limit. For
accident researchers, the following questions
arise: do these displays influence drivers’
speeding behaviour in a positive way? To what
extent do they influence driving behaviour? Is
the impact lasting or temporary?
UDV asked these questions at four locations
in Berlin. The results of the tests were aston­
ishing and entirely positive: average speed
­decreased by 2–6 km/h during the tests, to
30–35 km/h. In addition, more consistent
speed levels were observed. The effects were
apparent from the moment the devices were
activated: the number of driving infractions
went down sharply. Their impact did not sub-
side during the seven-month operating phase
as drivers got used to the devices. However:
once the dialog displays were removed, the
drivers immediately returned to their speeding
practices before installation. The subjective
perception of safety by pedestrians also in­
creased during the operating phase. Most of
the pedestrians interviewed for the study said
that the cars were going noticeably slower
­during the testing phase, and that they felt
safer crossing the street.
UDV believes that the positive/negative re­
inforcement model in the form of dialog dis-
plays is an adequate means of promoting
­tolerable speeding practices in sensitive areas,
such as senior facilities and schools. However,
dialog displays should not be viewed as a
­permanent solution for areas with frequent
accidents.
 2009 YEARBOOK 115

German Traffic Climate 2008 Premium income and claims expenditure in general liability insurance1)
For the first time in 2008, UDV conducted a Year premium claims expenditure3)
­representative survey of the traffic climate in income2) change against
previous year
Germany. The starting point of this project EUR m EUR m as %
was the observation that no representative 1980 1 870 1 402 6.4
data is available today with respect to percep- 1990 3 561 2 701 5.7
tions about traffic safety and the German 1995 5 450 4 332 10.7
public’s traffic safety practices. The “German 1999 5 891 4 883 3.3
2000 5 877 4 663 – 4.5
Traffic Climate” study fills that gap. The themes
2001 5 922 5 046 8.2
at the centre of this year’s survey, in addition
2002 6 148 4 647 – 7.9
to perceptions of traffic safety, included ac- 2003 6 306 4 401 – 5.3
ceptance of traffic rules, children in traffic and 2004 6 535 4 480 1.8
vehicle safety. The central finding of the study 2005 6 807 4 434 – 1.0
was that perceptions of traffic safety deviate 2006 6 874 4 468 0.8
sharply from objective accident data in some 2007 6 821 4 419 – 1.1
2008 6 826 4 578 3.6
cases. For example, 69 per cent of respondents
1) domestic direct business of GDV member companies, not including carrier’s liability, radiation and
said they feel “safe” or “very safe” in traffic, re- nuclear power plant, aircraft and spacecraft liability and pecuniary liability insurance, 2) gross pre­
gardless of age and gender, but the fact is that miums written, without insurance premium tax, 3) gross expenditure on claims of the financial year.

young adults aged 18–24, persons more than

65 years old and men are more at risk than
other groups.

The results of the “German Traffic Climate” General liability insurance

study have been posted on the UDV’s website
(www.udv.de). The study will be repeated at
regular intervals in order to identify safety-­
related developments and address current
themes.
Premium revenues in general liability insur­
ance are expected to remain stagnant at 6.8
billion EUR in 2009, while claims expenditures
should increase slightly, by 0.5 per cent (2008:
+ 3.6 per cent). The combined ratio is expected
to remain at 89 per cent, as in 2008. The de­
cline in the number of claims will continue,
while total claim expenditures should in­
crease, indicating a continued increase in the
average claim amount. In other words, each
individual loss is becoming more expensive.
116 2009 YEARBOOK INSURANCE CLASSES AND TYPES
The economic crisis has not yet led to signi­fi­
cant changes in liability insurance. In the in-
dustrial liability business, no clear trend can
be identified with respect to claims. There is
also no clear downtrend in premium revenues,
but a decline is expected with the 2009 pre­
mium settlement. There are clear differences
in the economic positions of export-depend­
ent businesses and companies which feed
off of domestic demand, with export-depend­
ent companies in a much poorer state. Ac­cord­
ingly, the future results of liability insur­ers will
depend in part on their portfolios.
Liability insurance will also continue to be af-
fected by stricter laws and an increase in un-
predictable risks. New technologies like nano-
technology, geothermal energy, wind energy
use (on land and off-shore), hydrogen fuel,
photovoltaic solar power, RFID (radio frequen-
cy identification) and carbon capture and stor­
age (CCS) technology will create many oppor-
tunities to use materials and energy sources
more efficiently, conserve natural resources
and protect the environment. However, the
risks associated with these new technologies
are still largely unknown. GDV will follow cur-
rent developments in science and politics and
obtain the information it needs to provide in-
surers with a basis for risk assessment, so that
they will be able to adjust their policy condi-
tions if necessary.
A look back at 2008
The combined ratio in general liability insur­
ance was 89.1 per cent in 2008. The ratio be­
tween provisions for claims filed and reported
during the year and payments on those claims
increased sharply, causing the loss ratio for
the year to increase by 2.5 per cent, to 67 per
cent. Claims expenditures increased by 3.6 per
cent, to 4.6 billion EUR, while premium rev­
enues were nearly unchanged at 6.8 billion
EUR.
Private accident insurance
Accident insurers expect the trend which has
been observed in recent years to continue in
2009: little growth is expected in gross pre­
mium revenues, with a modest decline in the
number of contracts and a slight deterioration
in claims. At the end of 2009, premium rev­
enues are expected to be up by just 1 per cent
(2008: 0.7 per cent), for 6.4 billion EUR in total
revenues. The number of contracts is ex­pected
to fall by 1 per cent (2008: – 1.7 per cent), to
28.1 million, while total claims expenditures
should increase by 3.0 per cent (2008: 1.5 per
cent), to 2.9 billion EUR. The loss ratio for 2009
will therefore increase to 58 per cent and the
combined ratio is expected to reach 82 per
cent (2008: 77.4 per cent).
 2009 YEARBOOK 117

Premium income, claims expenditure and loss ratios in private accident insurance1)
Year number of premium income2) claims expenditure3) loss ratio4)
insurance change against change against
companies previous year previous year
EUR m as % EUR m as % as %
1950 63 29 ° ° ° °
1960 91 124 ° 62 ° 57.3
1970 99 456 ° 214 ° 54.8
1975 107 828 ° 392 ° 53.6
1980 125 1 471 12.0 691 12.1 53.8
1985 129 2 261 7.7 1 028 8.4 52.5
1990 147 3 140 7.3 1 420 6.1 52.6
1995 165 4 662 5.6 2 166 8.5 54.1
1999 156 5 300 3.2 2 510 1.5 57.0
2000 156 5 404 2.0 2 460 – 2.0 55.2
2001 157 5 485 1.5 2 452 – 0.4 54.4
2002 153 5 604 2.2 2 392 – 2.4 52.4
2003 152 5 808 3.6 2 546 6.4 54.5
2004 148 5 969 2.8 2 586 1.6 54.6
2005 145 6 034 1.1 2 661 2.9 56.1
2006 142 6 237 3.4 2 795 5.0 57.4
2007 142 6 312 1.2 2 813 0.7 56.9
2008 142 6 359 0.7 2 856 1.5 57.1
1) domestic direct business of GDV member companies, excluding aviation and motor accident insurance, 2) gross premiums written, without insurance premium tax,
3) gross expenditure on claims of the financial year, 4) gross expenditure on claims in the financial year as a proportion of gross risk premiums earned.

Despite growing demand for newly intro­
duced senior products in recent years, we are
still not seeing a turnaround in accident insur­
ance. Once again, it must be kept in mind that
the downtrend in the total number of con-
tracts, together with increased engagement
in the senior segment, mean that the accident
insurance portfolio is particularly vulnerable
to the aging process projected by the Federal
Bureau of Statistics in its latest population
projection, until 2050: in accident insur­ance,
claims expenditures rise quickly with increa-
sing age.
Due to the poor economy and the continuing
political debates about private retirement and
disability provisions, general accident insur­
ance is unfortunately taking something of a
back seat in the public eye.
A look back at 2008
Results last year have been consistent with
general expectations. Gross premium rev­
enues fell by 0.7 per cent in 2008, to about 6.4
billion EUR, and there was also noticeable
­erosion in the number of contracts (– 1.7 per
118 2009 YEARBOOK INSURANCE CLASSES AND TYPES
cent, to 28.4 million). Total claims expendi­
tures increased by 1.5 per cent (2007: 0.7 per
cent), to about 2.9 billion EUR. All in all, there
was a minimal increase in the loss ratio for the
year, to 57.1 per cent, while the combined
­ratio fell to 77.4 per cent (2007: 79.2 per cent).
Legal expenses insurance
Premium revenues in legal expenses insur­
ance are expected to stagnate at 3.2 billion
EUR in 2009, as the premium adjustment op-
tions are expected to generate little to no
growth starting in October. The number of
contracts is also expected to stay where it was
in 2008 (20.6 million).
The number of claims in 2009 will be largely
determined by the impact of the economic
crisis on the job market. In the first half of
2009, legal expenses insurers had to process
15 per cent more employment law claims
than in the same period of the year before.
Payments actually increased by 20 per cent.
This trend is expected to continue in the
­second half of the year, and total claims ex-
penditures for 2009 as a whole are projected
to reach 2.5 billion EUR (up 9 per cent).
As in prior years, high claims expenditures are
also expected from contract law claims. Par­
ticularly due to abolition of the “all or nothing”
principle as part of the reform of insurance
contract law, claims payments are expected to
increase even more, since benefit cuts by the
insurer may result in numerous disputes
among the contracting parties depending on
the degree of negligence. The consequences
of the financial market crisis may also affect
contract litigation in the medium term. In all,
the loss ratio for 2009 is expected to reach 78
per cent, with a combined ratio of 102 per
cent.
The increase in attorney fees due to adoption
of the Lawyers’ Compensation Act in mid-2004
continues to have a negative effect: the new
Lawyers’ Compensation Act led to an increase
in fees by about 20 per cent. While these costs
have been mitigated somewhat by intensive
claim management, additional statutory
changes, like the Legal Services Act which took
effect in July 2008 and the Act Amending the
Prohibition of Contingency Fees, have made it
even higher to offset the rising costs. Both of
these statutes massively restrict the freedom
of action of legal expenses insurers.
The Legal Services Act also precludes German
legal expenses insurers from offering policy-
holders independent legal advice, although
this is done in other EU Member States with­
out a problem. Instead, policyholders in Ger-
many can only ask an attorney for advice.
However, in order to comply with policyholder
requests, German legal expenses insurers,
­almost without exception, now offer their
customers advice from attorneys over the
phone.
 2009 YEARBOOK 119

Lawmakers have also made very little use of Premium income, claims expenditure, number of contracts and
the possibilities pointed out by the Federal claims in legal expenses insurance1)
Constitutional Act with respect to liberali­ Year gross premium claims number of number of
sation of fee rules. In general, the prohibition income2) expenditure3) contracts4) claims
EUR m EUR m 1000 1000
of contingency fees, as well as minimum fee
1980 840 532 11 017 2 230
­rules, is still intact. The only time when a con-
1990 1 631 1 118 15 263 2 990
tingency fee can be stipulated is if the client 1995 2 216 1 776 18 691 3 534
would not otherwise have the ability to 1999 2 635 1 938 19 257 3 584
enforce his or her claim in court, and only with 2000 2 690 1 922 19 317 3 475
extensive notification and disclosure require- 2001 2 707 1 966 19 429 3 464
ments. 2002 2 727 2 042 19 586 3 612
2003 2 827 2 083 19 689 3 699
2004 2 924 2 137 19 501 3 569
Legal expenses insurers are very supportive of
2005 3 014 2 229 19 453 3 463
the developments relating to the subject of 2006 3 066 2 215 19 482 3 551
mediation. The considerations raised by law- 2007 3 158 2 223 20 467 3 647
makers with respect to implementation of the 2008 3 204 2 275 20 567 3 685
EU Directive on certain aspects of mediation 1) domestic direct business of GDV member companies, 2) gross premiums written, without insurance
premium tax, 3) gross expenditure on claims of the financial year, 4) from 2007: new system of count­
in civil and commercial matters, which estab- ing for group and collective contracts.
lishes rules for international disputes, are
being pursued. The expert panel convened by
the Federal Ministry of Justice has reviewed
the need for legislation addressing cross-­ Promoting settlements and creating alterna­
border and inter-state conflicts, as well as the tives to litigious practices are essential aspects
possible content of such legislation, and the of the approach employed by legal expenses
bill for a German Mediation Act will soon fol- insurers. The first pilot projects to integrate
low. mediation procedures into the legal expenses
insurance projects have affirmed these expec-
Legal expenses insurers were quick to appre- tations. In order to continue promoting media­
ciate the potential of mediation as a way to tion, GDV announced a non-binding “media­
resolve conflicts out-of-court and continue to tion clause” at mid-year, whose pur­pose is to
see it as a particularly effective way of protect­ make it easier for member companies to add
ing their customers’ interests and permanent- mediation to their benefit lists.
ly settling disputes.
120 2009 YEARBOOK INSURANCE CLASSES AND TYPES

A look back at 2008 l­ imiting claims expenditures. The number of

Gross premium revenues in legal expenses
­insurance increased by 1.4 per cent (2007: 3.0
per cent) in 2008, to 3.2 billion EUR, a much
slower rate of growth than in the year before.
The number of contracts increased slightly, by
0.5 per cent, to 20.6 million.
Claims expenditures for the year increased by
2.4 (2007: + 0.3) per cent, to 2.3 billion EUR.
Claims expenditures in this line have hardly
changed in recent years, as the availability of
legal advice over the telephone, a service
which legal expenses insurers started to offer
in 2006 and 2007, has had the effect of
claims for the year increased by only 1.0 (2007:
2.7) per cent. Over-the-phone legal advice is
now an established service, so that it cannot
be expected to affect the growth of claims
­expenditures any longer. With the loss ratio
lower, the combined ratio fell to 95.5 per cent,
the lowest figure in five years.
Property insurance
Based on the figures for the first half of 2009,
gross premium revenues in property insur­
ance are expected to increase by 2.1 per cent
(2008: 4.0 per cent) to 14.9 billion EUR. Parti-
cularly in private property insurance, adjust-
ment options (inflation adjustments) are ex-
pected to generate 3 per cent (2008: 5 per
cent) growth, to 7.8 billion EUR. In the case of
residential buildings, the gain is expected to

Claims per risk in comprehensive insurance on contents and buildings1)

number of claims in 1000 claims expenditure in EUR m3) average claim in EUR4)
2006 2007 2008 2006 2007 2008 2006 2007 2008
Comprehensive insurance on contents
(total) 1 303 1 329 1 199 1 153 1 146 1 148 884 862 958
fire2) 520 480 440 450 420 420 862 884 957
burglary/theft2) 410 400 390 410 410 420 1 018 1 060 1 103
water damage2) 240 220 210 210 190 190 885 906 883
storm2) 80 180 90 40 60 50 408 333 447
plate glass2) 30 30 20 10 10 10 267 262 289
natural forces2) 10 10 20 10 20 30 1 298 1 764 1 787
Comprehensive insurance on buildings
(total) 1 923 3 592 2 317 3 165 4 539 3 711 1 646 1 264 1 603
fire2) 190 190 190 740 640 750 3 384 3 287 3 750
water damage2) 1 140 980 1 040 1 710 1 530 1 710 1 411 1 514 1 526
storm2) 610 2 390 1 050 610 2 240 1 080 868 885 971
natural forces2) 20 20 20 50 50 60 2 358 2 692 3 406
1) domestic direct business of GDV member companies, 2) estimate based on partial portfolios (rounded to the nearest 10 000, or 10 million EUR), 3) gross expenditure on
claims of the financial year, 4) all companies which broke down the underlying figures of each average among sub-lines were included, from which the standard claim was
derived directly (no projection).
 2009 YEARBOOK 121

be 5 per cent (2008: 7.3 per cent). Premium
­revenues in industrial/trade/agricultural prop­
erty insurance will increase by 1 per cent
(2008: 2.4 per cent) and engineering insur­
ance by 2 per cent (2008: 5.7 per cent).
2009 claims were affected above all by the
frost at the beginning of the year, which cost
residential building insurers over 250 million
EUR. Also worthy of note is the 22 July ex­
plosion in Iserlohn, which damaged neigh­

Premium income in property insurance1)

Insurance class premium income2)
1995 2000 2007 2008
change change share
against against
EUR EUR EUR previous EUR previous
m m m year as % m year as % as %
Total 12 545 12 299 14 016 – 1.5 14 583 4.0 100.0
Private3) 5 897 6 468 7 202 0.8 7 563 5.0 51.9
plate glass insurance 625 567 494 1.9 526 6.6 3.6
comprehensive insurance on buildings 3 083 3 511 4 134 1.7 4 437 7.3 30.4
comprehensive insurance on contents 2 185 2 390 2 574 – 0.7 2 600 1.0 17.8
Non-private 6 648 5 831 6 814 – 3.9 7 020 3.0 48.1
Industrial: property and engineering4) 3 873 3 029 3 716 – 7.8 3 765 1.3 25.8
Industrial: property4) 2 436 1 717 2 357 – 10.4 2 328 – 1.2 16.0
industrial fire 1 565 702 793 – 4.5 729 – 8.1 5.0
fire/business interruption 589 306 374 – 1.9 372 – 0.4 2.6
extended coverage 240 506 708 – 11.6 707 – 0.2 4.8
all-risks insurance 38 202 482 – 22.1 519 7.9 3.6
Engineering/engineering BI 1 438 1 312 1 360 – 2.9 1 437 5.7 9.9
engineering insurances5) 1 373 1 254 1 273 – 3.2 1 348 6.0 9.2
business interruption insurance/engineering 65 59 87 1.5 89 1.8 0.6
Commercial6) 2 210 2 301 2 602 1.1 2 713 4.3 18.6
commercial/other fire 827 720 679 – 2.1 692 1.9 4.7
burglary/theft insurance 550 417 307 – 4.2 298 – 3.0 2.0
water damage insurance 306 260 247 – 1.2 253 2.4 1.7
storm insurance 275 245 252 1.1 267 6.2 1.8
multiple peril insurance 21 14 8 – 25.9 7 – 20.7 0.0
natural forces/commercial – 3 8 7.9 8 – 1.0 0.1
other BI and unspecified – 31 55 – 4.7 59 7.5 0.4
other property insurance classes – 73 74 – 4.3 89 20.6 0.6
combined commercial insurance 178 539 971 7.2 1 040 7.1 7.1
Agriculture 565 501 496 2.0 542 9.3 3.7
agricultural fire 386 337 296 – 0.3 306 3.4 2.1
livestock insurance 50 46 67 4.3 73 8.1 0.5
hail insurance 129 118 133 6.3 163 23.0 1.1
1) domestic direct business of GDV member companies, 2) gross premiums written, fire lines incl. fire safety tax, without insurance premium tax, 3) natural forces insurance,
which from 1993–1995 was included in “Private”, is here included in the year 1995, but not separately listed, 4) fire liability insurance, which belonged to industrial property
insurance until 1995, is here included in the year 1995, but not separately listed, 5) machinery, assembly, machinery guarantee, electronics, construction insurance, household
appliance and other engineering insurance, 6) other types of property insurance are included here, but not separately listed for 1995 and 2000.
122 2009 YEARBOOK INSURANCE CLASSES AND TYPES

bouring businesses as well, ultimately causing
the third-largest fire loss in the last ten years.
However, since claims expenditures due to
storm, hail, natural disaster and large-size
claims were much lower in the first half of
2009 than in the first half of 2008, total claims
expenditures are expected to be about the
same as last year’s. Overall, the combined
­ratio in property insurance should amount to
94 per cent, lower than last year’s figure of

Claims expenditure and loss ratios in the property insurance classes1)

Insurance class claims expenditure2) loss ratio3)
2007 2008 2007 2008
change against
previous year
EUR m EUR m as % as % as %
Total 11 399 10 321 – 9.5 81.3 71.4
Private 5 915 5 087 – 14.0 82.0 68.0
plate glass insurance 231 228 – 1.3 46.8 43.9
comprehensive insurance on buildings 4 539 3 711 – 18.2 110.0 85.0
comprehensive insurance on contents 1 146 1 148 0.3 44.2 44.2
Non-private 5 484 5 234 – 4.6 80.4 75.0
Industrial: property and engineering4) 2 877 2 854 – 0.8 77.1 76.5
Industrial: property 1 887 1 828 – 3.1 79.6 79.0
industrial fire 620 539 – 13.1 78.3 72.6
fire/business interruption 349 308 – 11.8 93.8 85.1
extended coverage 583 560 – 4.0 81.8 78.8
all-risks insurance 335 421 25.8 67.8 84.2
Engineering/engineering BI4) 990 1 027 3.7 72.8 72.6
engineering insurances4) 926 949 2.4 72.7 71.6
business interruption insurance/engineering 64 78 21.4 75.0 87.8
Commercial 2 303 1 996 – 13.3 88.9 73.8
commercial/other fire 472 458 – 3.0 69.2 66.0
burglary/theft insurance 225 219 – 2.9 72.8 72.8
water damage insurance 216 225 4.4 87.4 88.9
storm insurance 439 217 – 50.5 175.6 81.9
multiple peril insurance 4 3 – 34.1 47.6 40.5
natural forces/commercial 3 4 32.7 41.9 55.7
other BI and unspecified 34 33 – 5.0 62.8 55.4
other property insurance classes 91 62 – 31.9 131.7 66.3
combined commercial insurance 818 775 – 5.2 85.0 75.5
Agriculture 304 384 26.3 61.2 71.1
agricultural fire 157 174 10.6 53.0 57.3
livestock insurance 51 56 10.9 76.3 77.4
hail insurance 96 153 60.3 72.0 93.8
1) domestic direct business of GDV member companies, 2) gross claims expenditure for the financial year, 3) gross expenditure on claims for the financial year in proportion
to premium revenue, 4) amongst others machinery, assembly, machinery guarantee, electronics, construction insurance, household appliance and other or ­unspecified en-
gineering insurance.
 2009 YEARBOOK 123

Range of loss ratios

Share of claims expenditure in gross

premiums earned in 2008, by individual
insurance class

Industrial property insurance 79.0

EI/EBII1) 72.6

Commercial property 73.8

insurance

Agricultural property 71.1

insurance

Comprehensive insurance 44.2

on contents

Comprehensive insurance 85.0

on buildings

Motor liability insurance 97.3

Accident insurance 57.1

0 20 40 60 80 100 per cent

1) E
 ngineering insurance/
engineering business interruption insurance

© GDV-Jahrbuch 2009
124 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Large-size claims in industrial property insurance1) A look back at 2008

Fire claims in Industrial Fire/Fire BI, EC and All Risks Property insurance premium revenues in­
(until 1999 Industrial Fire/Fire BI only) creased by 4.0 per cent in 2008 (2007: – 1.5
Year claims number of claims average per cent), to 14.6 billion EUR. However, this in-
expenditure claim
crease was almost entirely attributable to in-
EUR bn EUR m
flation adjustments (adjustment to insured
1980 0.64 278 2.31
1990 0.85 289 2.95
amounts) and not to new business or the ad-
1995 1.13 267 4.24 justment of premiums to changes in risk
1999 1.14 253 4.52 (“premium adjustment”).
  20002) 0.88 199 4.43
2001 1.02 183 5.57 This circumstance is especially evident upon
2002 0.56 161 3.48 closer analysis of the individual lines. Pre­
2003 0.55 153 3.62
mium revenues increased by 7.3 per cent in
2004 0.54 150 3.58
2005 0.93 161 5.75
comprehensive residential building insurance
2006 1.03 154 6.71 and by 9.3 per cent in agricultural property in-
2007 0.67 171 3.92 surance, due in the first case to a clear increase
2008 0.72 142 5.05 in the cost of construction and, in the second
1) claims with a claims expenditure of at least 500 000 EUR (until 2001 1 million DM), 2) from 2000 case, to rising prices of agricultural products
including fire claims EC (extended coverage) and All Risks. Due to changes in classification some figures
have been slightly corrected from 2000. and corresponding growth in insured amounts.
On the other hand, premium revenues in in-
dustrial property insurance fell once again, by
1.2 per cent. The premium ratio, i.e. the ratio
95.4 per cent. In residential building insur­ of premiums to insured amounts, fell by more
ance, however, a combined ratio of 106 per than 10 per cent of some sub-lines. Only in
cent is expected, for an actuarial loss of 300 ­engineering insurance was there real improve­
million EUR. Looking back at the last ten years, ment, with the premium ratio up by 5.7 per
there has been only one year in which a net cent.
actuarial profit was posted in comprehensive
residential building insurance. On balance, Hurricane “Emma” in early March 2008 and a
resi­dential building insurers have accumu­ series of local and regional hail and torrential
lated a net actuarial loss of 4 billion EUR during rain events were a noticeable burden on prop­
that time, i.e. the equivalent of premium rev­ erty insurers’ balance sheets. However, since
enues for one year. the losses caused by these natural disaster
events were, on the whole, not as great as
those caused by Hurricane “Kyrill” in 2007,
claims expenditures actually normalised in
2008.

An analysis of combined ratio reveals net ac-
tuarial losses in 2008 despite the average
claims expenditures, particularly in residen­
tial building insurance (109.5 per cent). In all,
the combined ratio in property insurance fell
to 95.4 per cent in 2008, following clear losses
in 2007 (105.0 per cent).
Marine insurance
Actuarial projections for marine insurance
point to a stagnation in premium revenues at
1.4 billion EUR for 2009. In light of the state of
the economy, which has a considerable im-
pact on marine insurers, this figure may come
as a surprise: the German economy has
­slumped sharply since the fourth quarter of
2008. According to the Federal Bureau of
­Statistics, Germany’s gross domestic product
(GDP) in the fourth quarter of 2008 was down
2.4 per cent from the fourth quarter of the
year before, following declines of 0.3 per cent
and 0.6 per cent in the two previous quarters,
and in the first quarter of 2009, the GDP loss
grew to 3.5 per cent. In the second quarter of
2009, the German economy grew slightly for
the first time since the first quarter of 2008,
as German GDP in the second quarter of 2009
was 0.3 per cent higher than the year before
after adjusting for inflation, seasonal factors
and the calendar.
German exports reached a value of 994.9 bil­
lion EUR in 2009, up 3.1 per cent on the year.
Exports were up 8.1 per cent compared to
2007 and as much as 13.6 per cent compared
2009 YEARBOOK 125
to 2006. In 2009, however, exports were down
by double digits compared to the year before
every month, most recently by 18.9 per cent in
July 2009. The same was true of imports,
which were down 22.9 per cent in July 2009
relative to July 2008.
The shipping industry is affected by this trend
and is acting accordingly. Maritime freights
fell sharply and many shipbuilding contracts
will be cancelled if possible.
The logistics sector expects to lose 60 000 to
70 000 jobs due to the state of the economy.
44 per cent of companies polled by the Federal
Association for Road Haulage, Logistics and
Disposal are planning to reduce their fleets
and 52 per cent describe their operating re-
sults as “poor” in light of falling revenues and
declining utilization.
This development will affect marine insur­
ance premiums in the near future. That this
has not happened already is largely attribut­
able to the reporting structure in marine
insur­ance policies, in which premiums are
calcu­lated based on revenues in prior years. As
described above, the crisis first struck in the
fourth quarter of 2008, so that revenues from
prior years have only begun to decline.
126 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Marine insurance, in figures1)

Breakdown by premium income in EUR m2)
Year total3) thereof
change against goods in transit4) carrier’s ocean hull inland hull special
previous year share liability i­nsurance6) insurance7) classes8)
insurance5)
EUR m as % EUR m as % EUR m EUR m EUR m EUR m
1980 912 8.1 429 46.9 123 101 62 178
1990 1 214 5.6 550 45.3 204 62 83 298
1999 1 610 – 1.6 711 44.2 245 55 110 469
2000 1 636 1.6 739 45.1 231 47 116 485
2001 1 746 6.7 791 45.3 242 53 120 491
2002 1 793 2.7 792 44.2 253 65 129 511
2003 1 880 4.8 862 45.9 257 80 135 509
2004 1 912 1.7 869 45.4 265 76 152 518
2005 1 845 – 3.5 859 46.6 235 77 148 505
2006 1 860 0.8 850 45.7 234 84 148 520
2007 1 858 – 0.1 839 45.2 241 94 154 506
2008 1 730 – 6.9 729 42.1 266 72 152 494
1) domestic direct business of GDV member companies, 2) gross premiums written, without insurance premium tax, 3) including war premium and lump-sum claims,
4) without war premium, 5) insurance for damage or loss of goods transported by shippers and road haulers, 6) including builder’s risk business, 7) including water sport hull
insurance, from 1998 including other hull insurance, 8) luggage, valuables in transit, exhibition risk, etc.

The negative economic trend since the end of
2008 should not begin to affect marine insur­
ers’ results until after a considerable delay, in
2010. By the same token, however, the current-
ly anticipated economic recovery may not lead
to a recovery in marine insurance premium rev­
enues until after a comparable delay.
Marine insurance claims expenditures are up
about 5 per cent from the year before after
the first half of 2009, reflecting the consider­
able competitive pressure in this line, despite
the weak general economy, as well as the fact
that customer loss sensitivity tends to in­
crease in times of crisis. The loss ratio should
be 81 per cent and the combined ratio 102 per
cent.

A look back at 2008

Marine insurers posted a satisfactory actu­
arial result in 2008, thanks to improved loss
prevention efforts and a satisfactory eco­
nomic situation, with the exception of the
fourth quarter. After adjusting for the erosion
 2009 YEARBOOK 127

arising from insurance companies leaving Premium income in credit insurance and number of insolvencies
GDV, premium revenues actually increased by From 1991 including the new Federal States
a good 2 per cent (otherwise decreasing by 6.9 Year premium income1) business insolvencies2)
per cent). The loss ratio and combined ratio in- (new Federal States,
EUR m excluding Berlin)
creased slightly, to 70.0 and 91.0 per cent
1980 243 6 315
­respectively, demonstrating the sensitivity of
1990 629 8 730
marine insurance to the slightest changes in 1995 764 22 344 (5 874)
the global economy. 1999 949 26 476 (7 567)
2000 1 008 28 235 (8 047)
2001 1 096 32 278 (8 506)
Credit insurance 2002 1 140 37 579 (8 847)
2003 1 288 39 320 (7 575)
2004 1 308 39 213 (7 296)
The “credit insurance” category is generally
2005 1 374 36 843 (7 104)
understood to include trade credit insurance, 2006 1 372 34 137 (5 736)
suretyship insurance and fidelity insurance. 2007 1 381 29 160 (4 471)
2008 1 387 29 291 (4 392)
The core business of credit insurers is trade 1) domestic direct business of GDV member companies, gross premiums written, without insurance
premium tax, source until 2002: Federal Financial Supervisory Authority trade credit insurance and
credit insurance, which accounts for about 60 suretyship insurance, source from 2003: GDV trade credit, suretyship and fidelity insurance,
per cent of premium revenue. This insurance 2) comparability with the previous year’s figures disrupted due to Insolvency Code effective as per
1 January 1999 – Source from GDV: Federal Statistical Office.
class offers companies protection against
­losses on receivables from delivered goods and
services within Germany and abroad (trade In suretyship insurance, sureties, guarantees
and export credit insurance). Coverage is also or bonds are assumed at the order of policy-
afforded for risks which result from sales of holders in favour of domestic and foreign
machinery and equipment within Germany ­creditors in order to secure contractual or le-
and abroad with credit terms of up to five gal obligations for which policyholders are
­years (working capital credit insurance). If a debtors. The beneficiary may file a claim with
policyholder’s consumer becomes insolvent, the insurer if the policyholder becomes insol-
the policyholder will file a claim with the vent.
insur­er. Another important function of trade
credit insurance is constant monitoring of the
credit ratings of the policyholder’s clients, an
effective means of loss prevention.
128 2009 YEARBOOK INSURANCE CLASSES AND TYPES
Finally, fidelity insurance offers policyholders
protection from financial claims from tortious
acts, such as embezzlement, theft, misappro-
priation and fraud, including computer crime.
It covers claims due to intentional acts by
­employees, third-party and temporary staff,
managing directors, management board
members and “hackers.”
The economic environment for credit insur­
ance in Germany was heavily affected by the
financial and economic crisis and the associ­
ated rise in the insolvency risk. After increasing
by just 0.6 per cent last year due to the rela-
tively strong first half, to 29 291, corporate
bankruptcies are expected to increase by
around 20 per cent in 2009, to 35 000.
For the 2009 financial year, gross premium
­revenue in credit, suretyship and fidelity insur­
ance is currently expected to stay at about 1.4
billion EUR, and claims expenditures are ex-
pected to increase by about 50 per cent, to
around 1.5 billion EUR, yielding a loss ratio of
106 per cent. These figures demonstrate that
the financial and economic crisis has had a
considerable impact on actuarial results in
this line.
A look back at 2008
Gross premiums written in credit insurance
came to almost 1.4 billion EUR in 2008 (up 0.4
per cent) and claims expenditures were 981
million EUR (up 37.2 per cent), for a loss ratio
of 71 per cent. While the loss ratio in trade
­credit insurance increased from 52 per cent
the year before to almost 85 per cent, the loss
ratio in suretyship insurance declined from
about 48 per cent to 41 per cent. In fidelity in-
surance, the loss ratio increased from about
56 per cent in 2007 to around 67 per cent in
2008.

Nuclear insurance
The German Nuclear Reactor Insurance
­Community (DKVG), formed in 1957, currently
includes 34 (year before: 35) companies.
DKVG underwrites nuclear risks worldwide as
a reinsurer for the account of its member
companies. Direct insurance for nuclear facil­
ities within Germany is provided by member
companies in co-insurance consortiums,
which contribute their respective share of the
business into DKVG. DKVG receives foreign
business directly from the respective national
nuclear pool.
In general, DKVG offers insurance coverage
for:
n property claims (primarily from nuclear
energy and fire risks), including the costs of
decontamination and clean-up as well as
business interruption claims as a conse-
quence of insured property losses from
­nuclear fuel cycle facilities (especially nu­
clear power plants) as well as equipment
and inventory belonging to such facilities,
including power material and fuel;
n claims based on statutory liability from the
construction and operation of nuclear fuel
cycle facilities as well as the storage, condi-
tioning and transport of associated nuclear
fuel and other radioactive materials.
2009 premium, claims and
capacity trend
DKVG expects gross premium revenue to de-
crease by 0.4 million EUR in 2009, to 27.5 mil-
lion EUR, and by 0.8 million EUR for own ac-
count, to 22.5 million EUR. This is due above
2009 YEARBOOK 129
all to DKVG’s declining share of the US liability
business (0.6 million EUR) and premium cuts
in the domestic property insurance business
(0.3 million EUR) as new rates took effect. Pre-
mium revenues would have decreased even
further if not for significant advances against
the euro by the yen (31 per cent), Swiss franc
(11 per cent) and US dollar (6 per cent). Lost
revenues due to exchange rate losses from the
Korean won (25 per cent), the British pound,
the South African rand (23 per cent each) and
the Swedish krona (13.1) has less of an impact
on results.
As of printing, no significant claims have been
reported which could have a lasting impact on
DKVG’s results in 2009.
DKVG’s total foreign capacity (property and
­liability insurance combined) increased by an
average of 10 per cent, with liability insurance
capacity up 23 per cent and property insur­
ance capacity up 2 per cent. The increase in
foreign liability insurance capacity is in line
with anticipated demand, as implementation
of the revised international liability insurance
conventions into national law will increase
minimum operator’s liability for power plants
to 700 million EUR. Germany and Spain are
the only contracting states where operator’s
liability comes anywhere near that figure.
130 2009 YEARBOOK INSURANCE CLASSES AND TYPES

Nuclear insurance, in figures Developments in Germany and abroad

Year premium net insurance claims total In Germany, it remains to be seen whether the
income for own capacity2) for own victory of the CDU and the FDP in the parlia-
account1) account
EUR m mentary elections will lead to a reassessment
EUR m property liability EUR m
of nuclear energy policy. In any case, the con­
1970 2.2 40 18 0.1
struction of new nuclear power plants is not
1980 21.0 138 75 11.6
1990 76.4 264 94 2.2 expected, although the life of existing plants
1992 67.8 301 94 6.6 may be extended under some circumstances.
1993 71.5 326 94 1.9 Meanwhile, considerable investments will be
1994 77.6 344 96 9.7 made to modernise existing plants and to im-
1995 63.0 344 96 2.6 prove their efficiency.
1996 56.4 374 96 1.0
1997 53.0 374 96 8.1
1998 50.5 374 96 21.0
In other countries, on the other hand, nuclear
1999 38.9 425 119 – 3.9 programmes are progressing rapidly. In the
2000 39.5 414 117 0.0 US, all applications to extend the life of nu­
2001 31.9 412 116 7.1 clear ­power plants to 60 years have been
2002 28.9 394 125 – 1.4 grant­ed. All across the world, 53 nuclear pow-
2003 27.8 266 139 3.5 er plant units are currently under construc-
2004 25.0 248 133 6.9
tion, in­cluding 16 in China alone. Countries
2005 26.9 228 146 11.5
2006 30.0 226 162 2.9
like Italy, Poland, Turkey and Australia are con-
2007 26.5 227 168 1.5 sidering a move into nuclear energy. As a re-
2008 23.3 224 198 5.2 sult, the ­future of nuclear energy seems to be
2009   22.53) 225 226 0.14) secure until well past the mid-21st century,
1) premiums from indirect domestic and foreign business exclusively, 2) domestic capacity, 3) estimated, and with it the need to insure the associated
4) based on available reports (as of 1 October 2009) – Source: Deutsche Kernreaktor-Versicherungs­
gemeinschaft (DKVG). risks.

This appears to be the assessment of the

The demand of foreign pools for DKVG pro­p­
erty insurance capacity is trending downward,
as aggregate demand has remained ­largely
constant in recent years but national pools
have raised their deductibles and have
increas­ingly based their expenditures on the
reciprocity (quid pro quo) principle.
heads of the 27 EU Member States, who on
8/9 March 2007 adopted the “20-20-20” ener-
gy policy agenda. This agenda calls for im­
proving energy efficiency by 20 per cent, cut-
ting carbon dioxide emissions by 20 per cent
and raising the renewable energy share by 20
per cent, all by the year 2020. In setting these
targets, the heads of government conceded
that nuclear energy offers great advantages
with respect to security of the energy supply,
environmental protection and efficiency. Un-
like before, nuclear energy is to play a sig­
nificant role in this energy agenda. The EU
plan of action which has been formulated in
this regard currently has three main points:

n The plans calls for raising safety standards,
simplifying official safety inspections by
harmonising safety regulations and raising
public acceptance for safety targets
through international cooperation. As a re-
sult, it is to be expected that most nuclear
power plants will be standardised systems,
with just a few different reactor models.
n Aid will also be given to promote advances
in research and technology in order to
further optimise existing nuclear power
plants, develop advanced recycling technol­
ogies in order to minimise radioactive
­waste, commission two fast breeder reac-
tors of various types by 2020 and to com-
mission a high-temperature reactor capable
of generating alternative fuels in addition
to electricity.
n Finally, a forum will be created which will
provide a political framework for discus-
sions and debates about the future of nu­
clear energy. Despite this item, the heads of
government have agreed that each country
will retain the ability to make decisions
about nuclear energy use within its sover­
eign territory.
A look back at 2008
DKVG earned 28.0 (year before: 31.7) million
EUR in gross premium revenues in 2008,
includ­ing 23.3 (year before: 26.5) million EUR
for own account.
2009 YEARBOOK 131
Revenues for own account included:
n 0.5 (year before: 0.6) million EUR
from the domestic property business,
or 2.2 (year before: 2.3) per cent;
n 7.4 (year before: 7.4) million EUR
from the domestic liability business,
or 31.8 (year before: 28.1) per cent;
n 7.6 (year before: 8.8) million EUR
from the foreign property business,
or 32.6 (year before: 33.3) per cent;
n 7.8 (year before: 9.6) million EUR
from the foreign liability business,
or 33.4 (year before: 36.3) per cent;
The decline in premium revenues in the
­ omestic property business is attributable to
d
the adoption of new rates. The foreign busi-
ness suffered from declines in the US dollar
and the yen, which comprise the majority of
foreign premium volume. The US dollar lost
10 per cent against the euro and the yen 5 per
cent. But other currencies also declined, as the
Korean won fell by 11 per cent, special drawing
rights (the liability insurance coverage of most
European countries is denominated in this
currency) fell by 6 per cent, the British pound
fell by 8 per cent, the Swedish krona by 4 per
cent and the Swiss franc by 3 per cent.
Another cause of this decline was DKVG’s
abandonment of its business interruption
cover­age exposure in the United Kingdom due
to inadequate terms (0.2 million EUR) and the
loss of share in Japanese (0.3 million EUR),
Chinese (0.3 million EUR) and Czech (0.2 mil­
lion) EUR property insurance contracts due to
higher deductibles by the pools in those coun-
tries.
132 2009 YEARBOOK INSURANCE CLASSES AND TYPES
In liability insurance as well, there was a loss
of business in the US (0.6 million EUR) and
­Japan (0.3 million EUR). Lost premium rev­
enues also resulted from delayed settlements
in Brazil (0.4 million EUR) and France (0.1 mil-
lion EUR). Meanwhile, premium revenues in-
creased in Spain due to the increase in the
statu­tory minimum operator’s liability on 1 July
2007 (0.2 million EUR). Claims expenditures
for own account came to 5.2 million EUR in
2008, with a loss ratio for own account of 19.6
per cent (year before: 5.7 per cent).
Among the significant claims in 2008 was a
mechanical loss at the Mexican nuclear power
plant Laguna Verde 1 which was discovered in
a routine inspection on 13 September 2008
during a fuel element change. The problem
was caused by a tear in a water jet pump
which circulates reactor coolant. Based on the
information currently available, it is not cer-
tain if this loss is covered. Nevertheless, DKVG
has set aside its 19 per cent share of the total
claim amount, estimated by the adjustor at
22.5 million USD, as a precautionary.
Another loss occurred in Cezus, a French plant
operated by AREVA Group, which manufactures
zirconium cladding tubes for fuel elements.
There was a fire loss at this plant on 25 March
2008. Based on preliminary estimates, this
loss will cost insurers 8.1 million EUR, which
will be shared evenly by property and busi-
ness interruption insurers. DKVG’s share is 6.8
per cent. At the Tianwan 1 nuclear power
plant in China, there was a fire loss to a trans-
former on 6 August 2008. The 100 per cent
loss reserve is 3.1 million USD and DKVG’s
share is 6.51 per cent.
In connection with claims settlement results,
DKVG sustained a considerable loss from the
2004 property claim for the Thorp (Sellafield)
reprocessing plant, for which DKVG set aside
10 million EUR in provisions. Due to the British
pound’s 23 per cent loss against the euro, this
has resulted in a settlement loss in the
amount of 2.3 million EUR, although this loss
was offset by an equal amount of exchange
rate gains. DKVG recorded a settlement profit
of 0.9 million from provisions in the US liability
business.
Expenditures for insurance operations (for
own account) amounted to 3.0 million EUR
(year before: 3.1 million EUR), including 1.2
(year before: 1.6) million EUR for commissions
and 1.8 (year before: 1.5) million EUR for other
expenses. Other expenses included 0.1 million
EUR in personnel expenses and 0.2 million
EUR in material expenses (including 0.14 mil-
lion EUR in legal and consulting expenses). The
expense ratio was 13 per cent (year before:
12 per cent), and the combined ratio (total
expendi­tures for own account due to claims
and insur­ance operations) was therefore 35.0
(year ­before: 17.7) per cent.
DKVG’s 2008 financial statements show 14.3
million EUR in net income (year before: 22.1
mil­lion EUR), including non-actuarial activ­
ities. This figure does not include income
­earned from nuclear plant provisions, which
are reported by the individual companies.
 2009 YEARBOOK 133

Insolvency insurance Basic data on the Pension Assurance Association

Year number of amount paid number of amount of number of
The task of the Pension Assurance Association member guarantees loss persons
companies registered
is to assure the statutory vested claims and with pension
as per
periodic pensions of employees and pension entitlement1)
31st December EUR m EUR m
recipients of companies regarding whose as- 1999 39 774 530 394 611 46 731
sets or estates insolvency proceedings have 2000 39 778 440 442 548 33 365
been initiated. The Pension Assurance As­ 2001 39 893 546 479 614 35 737
2002 40 643 1 017 705 1 481 85 261
sociation commenced business operations on
2003 45 858 1 036 726 877 54 923
1 January 1975. The basis of its activity is the 2004 53 102 882 753 761 36 373
Act for the Improvement of Occupational 2005 59 636 1 238 745 1 234 56 979
Retire­ment Provision, in accordance with 2006 64 696 826 654 792 27 497
which the Pension Assurance Association is 2007 69 376 823 502 944 30 417
also endowed with premium sovereignty under 2008 73 093 506 454 592 18 347
1999–2008 – 7 844 5 854 8 454 425 630
public law. The insurance commences with
1) pensioners and applicants with vested rights registered in the respective year whose company
the insolvency of the employer, provided the ­pensions must be paid in full or in part by the Pension Assurance Association as a result of employer
employees already receive an occupational insolvency.
pension or have a statu­tory vested claim to
such pension.
viously. The new provision applies for commit-
Protection is afforded for occupational pen­ ments made after 31 December 2008. There
sion schemes in which the performance of are transitional provisions on the non-forfeit-
pension claims is jeopardised in the event of ability of expectancies based on older com-
the employer’s insolvency. These claims include mitments.
direct pension commitments, or commit-
ments via a relief or pension fund, as well as Special rules apply for new employee-financed
direct insurance commitments in certain commitments (deferred compensation) is­sued
­cases, i.e. whenever only a revocable subscrip- in 2001 or later. These commitments vest
tion right exists, or if an irrevocable subscrip­ ­immediately, i.e. there is no minimum age or
tion right created by an insurance contract is minimum term. There are also special rules
assigned, pledged or loaned. with respect to immediate bankruptcy protec-
tion (in some cases), which does not take ef-
Under the reform of occupational pension law fect for deferred compensation commitments
by the Act to Promote Supplementary Retire- issued before 2001 and all employer-financed
ment Provisions and Amending Title III of the commitments until two years have passed
Social Code, a statutory vested claim only since the commitment was issued (in order to
exists for employees of a member company protect the Pension Assurance Association
above 25 years of age who were promised oc- from abusive claims).
cupational coverage at least five years pre­
134 2009 YEARBOOK INSURANCE CLASSES AND TYPES
The resources for the execution of insolvency
insurance come from premiums from the
­employer subject to insurance contributions
based on obligations under public law. In
2006, the pension value allocation procedure
pre­viously in effect was converted into a fund­
ed procedure. Premiums cover the present
­value of benefit claims arising in the current
calendar year and, for vested rights, the differ­
ence in present value between the end of the
current and previous calendar years. Because
claims expenditures differ from year to year,
the premium rate will generally rise and fall.
The present value of vested rights covered
based on insolvencies occurring prior to
31 December 2005 (the “original obligation”)
was charged to employers in January 2007 as
single premiums based on their 2005 pre­
mium assessment basis.
Premium rate fluctuating
The weighted average premium rate over the
last five or ten years was 3.3 per mille in each
case. In the previous 34 financial years of the
Pension Assurance Association, it was 2.6 per
mille of the premium assessment bases. In
2008, it was 1.8 as a result of a continued dec-
line in claims, down from 3.0 per mille the
year before. About 73 100 employers currently
pay premiums to the Pension Assurance
­As­sociation and each month, pensions in the
amount of around 59.8 million EUR are paid
out to about 454 200 pension recipients, as in-
dividuals entitled to provisions from nearly
12 600 insolvencies since 1975.
In all, there are about 10.0 million persons
­ ntitled to pensions due to insolvency protec-
e
tion, including 3.9 million recipients of occupa­
tional pensions and 6.1 million employees
with non-forfeitable claims (2008). The net
present value of these pension obligations in
the form of the premium assessment basis is
around 277 billion EUR.
Significance for employees and employers
Occupational pension insolvency insurance is
not only of considerable importance for its
­beneficiaries, but also, from the perspective of
financial policy, for the companies themselves.
Only through insolvency insurance could the
free system of occupational pensions which
has emerged over time in Germany remain in-
tact. It allows employers to invest in their own
companies cover capital accrued to fulfil pen-
sion commitments.
In the last ten years, from 1999 up to and in-
cluding 2008, about 426 000 pension recipi-
ents and expectants with vested claims after
the insolvency of their employers were insur­
ed by the Pension Assurance Association
based on about 5 900 insolvencies. The claims
volume reached about 8.5 billion EUR during
this period.
Also responsible for the new Federal States
Since 1 January 1992, the Pension Assurance
Association has also been responsible for in-
solvency insurance of the occupational pen­
sions in the new Federal States. Since the Oc-
cupational Pension Act only took effect in the
new Federal States at that time, however, and,
since, in accordance with the wording of the
Unification Treaty, this Act only applies to
 2009 YEARBOOK 135

commitments issued after 31 December 1991, The largest reinsurance classes

elements with the necessary reporting and Premium income earned, loss ratio and technical result in 2007
­insolvency insurance premium payment obli- gross premiums loss Insurance
gations have been slow to develop. earned of professional ratio1) result2)
reinsurers
2007 share 2007
Assumption of insolvency insurance EUR bn as % gross as %
in Luxembourg Life assurance 10.836 27.0 53.2 7.9
Health insurance 1.841 4.6 68.6 4.6
In 2002, the Pension Assurance Association
General accident insurance 1.364 3.4 67.6 – 20.7
assumed the occupational insolvency insur­
General liability insurance 3.901 9.7 79.3 – 7.4
ance of the Grand Duchy of Luxembourg. This Motor insurance 6.070 15.1 80.0 – 3.4
expansion of the association’s duties was Aviation and areospace insurance 0.456 1.1 68.3 12.6
based on an agreement of 22 September 2000 Fire insurance 5.839 14.6 51.8 22.2
between the Federal Republic of Germany and Marine insurance 1.824 4.6 59.7 12.1
the Grand Duchy of Luxembourg on coope­ra­ Credit and suretyship insurance 1.215 3.0 33.6 23.1
Aircraft and spacecraft liability 0.726 1.8 64.9 13.0
tion for insolvency protection in occupa­tional
Other property insurance 5.078 12.7 77.6 – 5.4
pensions. . Other casualty, property and
accident insurance 0.947 2.4 68.7 – 3.1
Total 40.097 100.0 64.3 4.5
A look back at 2008 1) gross expenditure on claims of the financial year in proportion to gross premiums earned, 2) gross
technical result in proportion to gross premiums earned – Source: Federal Financial Supervisory Authority.
The claims volume was around 592 million
EUR in 2008, down from 944 million EUR the
year before (– 37.3 per cent). With 454 (year
before: 502) insolvencies, 7 214 (year before: Reinsurance
11 884) pension recipients with an average
monthly pension of 179 (2008: 198) EUR and The global economic slump and the severe re-
11 133 (year before: 18 533) employees with cession in the industrialized states have natu-
vested claims were insured. The total number rally inhibited demand for direct insurance
of pension recipients was 18 347 (2007: 30 417). and reinsurance coverage. As a result, the
growth of insurance markets in 2009 was
The premium revenue of the Pension Assur­ ­limited to emerging markets, and even there
ance Association decreased to around 506 the pace of growth was down. However, there
(2007: 823) million EUR in 2006 (– 38.5 per are other factors which are acting to stabilize
cent). The necessary premiums should be re- the reinsurance market. In particular, the fact
garded in relation to the premium assessment that insurance capital reserves are still lower
basis of 277 (2007: 272) billion EUR reported than before the financial crisis should limit
by members, resulting in a premium rate of existing reinsurance capacity, a trend which
1.8 (2007: 3.0) per mille. should be reinforced by the demand for cover­
age of natural disaster risks, which continues
to be strong.
136 2009 YEARBOOK INSURANCE CLASSES AND TYPES
Regardless of the impact of the economic
­crisis, the German insurance industry continues
to grow at a slower pace than in other coun-
tries. In casualty, property and accident insur­
ance, this trend is being reinforced by the im-
pact of the market cycle. Nevertheless, the pri-
vate insurance model will emerge stronger in
the medium and long terms, promoting
growth in the life and health insurance mar-
ket, and not just in Germany but in many
other industrialised states as well.
The consistent optimisation of risk manage-
ment practices in recent years has not only
proved beneficial for reinsurers in managing
the financial crisis, but have also clearly im-
proved transparency and flexibility with re­
spect to existing insurance risks. This improved
know-how also benefits direct insurers, the
customers of the reinsurance industry, and,
ultimately, consumers, trade and industry, the
real consumers of insurance products. Prepara­
tions for the new EU solvency rules (Solvency
II) are creating strong incentives to further
professionalise risk management, and these
incentives have had an effect on insurers and
reinsurers operating in Germany. Consistent
regulatory rules in effect beyond national
boundaries and the adoption of solvency rules
based on economic risk analysis will increase
stability and improve the competitiveness of
the insurance industry, and will therefore ulti-
mately meet the needs of policyholders as
well.
A look back at 2008
The international financial crisis and the state
of the general economy dragged down the in-
surance industry, particularly in the second
half of 2008, as global economic growth
­slowed considerably in the third and fourth
quarters. Global financial markets sustained
heavy losses, as equities markets in Europe,
the US and Asia experienced massive slumps.
The German economy was weaker in 2008
than the year before, but still better than the
euro zone average, with the strongest growth
coming from the investment and export sec-
tors. Growth remained robust until mid-year,
which affected the job market, and the un­
employment rate continued to fall sharply.
Development of the reinsurance industry
The global economy was robust until mid-
2008, a circumstance which boosted the
growth of the insurance industry, particularly
in emerging markets. In the case of casualty,
property and accident insurance, however,
this growth was diminished at times by cyc­
lical rate declines and the life and health
insur­ance markets were affected by statutory
and tax changes, as well as by the state of the
general economy. Life assurance was also af-
fected by the financial markets crisis.
The capital base in the reinsurance industry
decreased for the first time in years as a result
of the international financial crisis and major
losses from natural disasters, although on the
whole, reinsurers were able to come out of the
crisis relatively strong. Demand for reinsur­
ance increased at the end of the year due to
the fact that direct insurers also saw their
 2009 YEARBOOK 137

c­ apital base decrease. At the time of the 1 Janu- Claims and operating expenses in reinsurance
ary 2009 renewals, it was evident that market Claims expenditure and loss and expense ratio of reinsurance companies
conditions were stabilizing in most regions Year gross claims gross loss operating
and lines, and in some cases had shown con­ expenditure ratio1) expenses ratio2)
EUR bn as % as %
siderable improvement.
1990/1991 14.863 78.3 29.1
1991/1992 15.894 74.0 29.4
Casualty, property and accident reinsurance 1992/1993 17.736 73.5 27.9
Casualty, property and accident reinsurance 1995 17.996 63.1 26.4
was once again affected by major losses due 2000 28.349 72.1 30.8
to natural disasters, in addition to the conse- 2001 40.508 92.2 30.2
quences of the financial crisis for the insurers’ 2002 37.997 71.0 27.3
2003 31.142 60.6 27.2
capi­tal base and fluctuations in prices and
2004 28.442 60.3 27.4
terms.
2005 33.285 73.3 28.5
2006 26.235 58.4 26.9
The 2008 renewal negotiations were charac- 2007 25.801 64.3 27.6
terized by rising competition in reinsurance 1) share of gross expenditure on claims of the financial year in gross premiums earned, 2) share of gross
markets until mid-year. As a result, prices were expenditure on insurance operations in gross premiums earned – Source: Federal Financial Supervisory
Authority.
generally down at first, although market
­conditions varied widely by region and insur­
ance line, unlike in the past. The worsening of
the financial crisis in autumn 2008 and the Life and health reinsurance
shrinking capital base then had the effect of The social security reforms and the long-term
stabilising the markets in a highly uncertain trend towards private retirement provisions
environment, allowing for higher prices at the continue to stimulate growth in life assur­
renewals on 1 January 2009. ance, and this has benefited the life reinsur­
ance market. However, the life assurance
Extreme weather events are on the rise, as are business has been weighed down by the con-
the resulting losses. The year 2008 was domi- sequences of the financial crisis. The global
nated by extreme temperatures, record rain- health care market offers a large number of
fall and some of the strongest tornado activity growth opportunities, which may benefit
on record in the US. In Germany as well, bad health reinsurers. It is apparent, for example,
weather was responsible for considerable that demand for reinsurance of large and
claims expenditures. Setting aside random ­catastrophic losses is growing as medical ad-
annual fluctuations in natural disaster risks, vances continue.
both the long-term historical trend and the
foreseeable consequences of climate change
demonstrate that exposure to natural disas-
ter risks is increasing.
XX Jahrbuch
2009
2009
YEARBOOK DER GDV UND SEINE MITGLIEDER Jahrbuch138 | 139
2009 XX

The Berlin-based German Insurance Association (GDV) is the umbrella organisation for private
insurers in Germany. Its 468 member companies, with 212 000 employees and trainees, offer
comprehensive coverage and retirement provisions to private households, trade, industry and
public institutions, through 447 million insurance contracts. As a risk taker and major investor
(with an investment portfolio of 1 165 billion EUR), the insurance industry has outstanding
significance in connection with investments, growth and employment in our economy.

GDV and its members

140 2009 YEARBOOK GDV AND ITS MEMBERS
In addition to the Association of Private Health
Insurers (the PHI Association), GDV has 468
member companies, including 50 branch of­
fices of foreign insurance companies and 16
insurers which are based abroad. Its 402 Ger­
man member companies include 283 joint-
stock companies, 84 mutual insurance com­
panies, 19 statutory bodies, 14 limited liability
companies, one registered association and
the Association of Public Insurers. Along with
the Employers’ Association of Insurance Com­
panies in Germany (AGV), GDV operates the
Vocational Training Centre of the German In­
surance Industry (BWV).
GDV articulates and represents the positions
of the German insurance industry before so­
ciety, politicians, businesses, the media and
academia, working to achieve regulatory con­
ditions which will allow insurers to perform
their responsibilities in optimal fashion. At
the same time, the Association is a source of
expert information about all matters relating
to the insurance industry, making available its
wealth of experience and information to the
public. GDV informs and supports its member
companies as a service provider, identifies po­
litical and social developments of relevance
for the sector and proposes proactive solu­
tions.
In addition to its core areas, life assurance and
casualty, property and accident insurance,
GDV’s work includes numerous interdiscipli­
nary themes (see Committees, Page 142).
GDV brings the specialised knowledge of its
experts, committees and boards into the so­
cial debate on all levels. There are many over­
laps between GDV’s work and that of other
leading associations of the German economy,
with whom GDV works closely. GDV main­
tains an EU office in Brussels and represents
the German insurance industry with the
­Comité Européen des Assurances (CEA), the
European insurance association, which is
based in Brussels. GDV supports training and
further education through the Vocational Train­
ing Centre of the German Insurance Industry
(BWV) and the German Insurance Academy
(DVA). The PHI Association, with registered of­
fice in Cologne, is responsible for questions re­
lating to private health insurance. In its capac­
ity as an employer, the insurance industry is
represented by the Employers’ Association of
Insurance Companies in Germany (AGV).

GDV is also people who work for the insurance
industry, either as volunteers or as employees.
Representatives from its member companies
contribute their expertise and practical know­
ledge to GDV’s bodies, boards and commit­
tees. The bodies of the Association, whose
­legal form is that of a registered association,
are the Membership Assembly, the Executive
Committee and the Presiding Committee,
which is the highest management body. The
Presiding Committee chooses an Association
President from its number, who works in a vol­
unteer capacity. Rolf-Peter Hoenen has served
as GDV President since 14 November 2008.
Dr. Jörg Freiherr Frank von Fürstenwerth has
served as managing member of the Presiding
Committee since 1 August 1996.
The Presiding Committee is currently
c­ omprised as follows (as of October 2009):
– Rolf-Peter Hoenen,
Präsident; Sprecher der Vorstände der
HUK-Coburg Versicherungsgruppe, i.R.
– Dr. Josef Beutelmann, Wuppertal,
Vorsitzender der Vorstände,
Barmenia Versicherung
– Dr. Nikolaus von Bomhard, München,
Vorsitzender des Vorstandes,
Münchener Rückversicherungs-Gesellschaft
– Dr. Friedrich Caspers, Wiesbaden,
Vorsitzender des Vorstandes,
R+V Versicherung AG
– Dr. Alexander Erdland, Stuttgart,
Vorsitzender des Vorstandes,
Wüstenrot & Württembergische AG
– Dr. Jörg Frhr. Frank von Fürstenwerth, Berlin,
Vorsitzender der Hauptgeschäftsführung,
Gesamtverband der Deutschen Versiche­
rungswirtschaft e.V.
– Dr. Frank Keuper, Köln,
Vorsitzender des Vorstandes,
AXA Konzern AG
2009 YEARBOOK 141
– Dietmar Meister, Köln,
Sprecher des Vorstandes,
Generali Deutschland Holding AG
– Dr. Torsten Oletzky, Düsseldorf,
Vorsitzender des Vorstandes,
ERGO Versicherungsgruppe AG
– Dr. Robert Pohlhausen, Hannover,
Vorsitzender der Vorstände,
VGH Landschaftliche Brandkasse Hannover,
– Dr. Gerhard Rupprecht, Stuttgart,
Vorsitzender des Vorstandes,
Allianz Deutschland AG
– Dr. Bernhard Schareck, Ettlingen,
Vorsitzender des Aufsichtsrates,
Karlsruher Lebensversicherung AG,
Mitglied des Aufsichtsrates,
Württembergische Lebensversicherung AG
– Friedrich Schubring-Giese, München,
Vorsitzender des Vorstandes,
Versicherungskammer Bayern, Versiche­
rungsanstalt des öffentlichen Rechts
– Reinhold Schulte, Dortmund,
Vorsitzender der Vorstände,
SIGNAL IDUNA Gruppe
– Dr. Maximilian Zimmerer, Stuttgart,
Vorsitzender des Vorstandes,
Allianz Lebensversicherungs-AG
GDV management is responsible for imple­
menting the Association’s objectives, as well
as drafting and implementing resolutions by
its bodies and committees. To this end, it has
367 qualified and committed employees at its
disposal in Berlin, in the EU office and in the
central IT department.
Certain GDV activities for its members have
been outsourced to VdS-Schadenverhütung
GmbH in Cologne and GDV-Dienstleistungs-
GmbH & Co. KG in Hamburg.
 GDV committees

142 2009 YEARBOOK

Presidential Board

Rolf-Peter Hoenen, President, Coburg
Dr. Josef Beutelmann, Wuppertal
Dr. Nikolaus von Bomhard, Munich
Dr. Friedrich Caspers, Wiesbaden
Dr. Alexander Erdland, Stuttgart
Dr. Jörg Frhr. Frank von Fürstenwerth, Berlin
Dr. Frank Keuper, Cologne
Dietmar Meister, Cologne
Dr. Torsten Oletzky, Düsseldorf
Dr. Robert Pohlhausen , Hanover
Dr. Gerhard Rupprecht , Stuttgart
Dr. Bernhard Schareck, Ettlingen
Friedrich Schubring-Giese, Munich
Reinhold Schulte, Dortmund
Dr. Maximilian Zimmerer, Stuttgart

Steering Committee on Life Insurance/Pension Funds Steering Committee on Non-Life Insurance

Chairman: Dr. Maximilian Zimmerer, Chairman: Dr. Robert Pohlhausen,
Allianz Lebensversicherungs-AG; Stuttgart VGH Landschaftliche Brandkasse Hannover; Hanover

Committees Committees
Mathematics and Statistics Trade and Industry Customers
Chairman: Dr. Johannes Lörper, Chairman: Dr. Walter Tesarczyk,
Hamburg-Mannheimer Versicherungs-Aktiengesellschaft; Hamburg Allianz Versicherungs-Aktiengesellschaft; Munich

Social Policy Motor Insurance

Chairman: Karl Panzer, Chairman: Dr. Klaus Sticker,
Lebensversicherung von 1871 a.G., Munich SIGNAL IDUNA Gruppe; Dortmund

Taxation in Life Insurance/Pension Funds Private Customers

Chairman: Dr. Michael Renz, Chairman: Thomas Vorholt,
Zurich Deutscher Herold Lebensver­sicherung AG; Bonn VGH Landschaftliche Brandkasse, Hanover

Medico-Actuarial Science/Risk and Benefit Assessment

Chairman: Dr. Helmut Hofmeier,
Gothaer Lebensversicherung AG; Cologne

Central Committees
Business Administration and Information Technology Central and Eastern Europe
Chairman: Dr. Christian Hofer, Chairman: Udo Martinsohn,
HUK-Coburg Versicherungsgruppe; Coburg Swiss Re Europe S.A. Niederlassung Deutschland; Unterföhring near
Munich

Finance and Risk Management Press and Information

Chairman: Dr. Jörg Schneider, Chairman: Rolf-Peter Hoenen,
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in President
München; Munich

Investment Affairs Legal Affairs

Chairman: Dr. Wolfgang Weiler, Chairman: Prof. Dr. Wolfram Wrabetz,
HUK-Coburg Versicherungsgruppe; Coburg Helvetia Versicherungen, Frankfurt

Accounting Distribution
Chairman: Dr. Rolf Ulrich, Chairman: Uwe Laue,
ERGO Versicherungsgruppe AG; Düsseldorf Debeka Versicherungen; Koblenz

Risk Management Economics

Chairman: Dr. Jan Martin Wicke, Chairman: Dr. Heinz-Peter Roß,
Wüstenrot & Württembergische AG; Stuttgart HDI-Gerling Lebensversicherung Aktiengesellschaft; Cologne

Taxation Mutual Insurance Associations Law

Chairwoman: Dr. Martina Baumgärtel, Chairman: Dr. Werner Görg,
Allianz SE, Munich Gothaer Allgemeine Versicherung Aktiengesellschaft, Cologne

as of October 2009
Organisational chart

2009 YEARBOOK 143

Policy Coordi­
nation Unit
Foreign Political
Affairs Affairs

Press and
Executive Board Information

Chairman of the Executive Board Information

Members of the Executive Board Centre Zukunft
„klipp + klar“

Europe/
International
Issues

Mathematics/ Liability, Property,

Medico-Actuarial Risk Accident, Engineering,
Taxes Legal Affairs IT
Science/Pro­duct Management Legal Expenses Transport and
Comparisons and Credit Aviation
Insurance, Insurance,
Statistics Statistics
Agency and Data Protection/ Human
Social Policy Accounting
Broker Issues Basic Issues Accident Resources
Motor
Research/
Insurance,
Competence
Motor Vehicle,
Business Centre
Technology and Budget/Finance
Asset Administration/ for Safety in
Pension Funds Statistics and Internal
­ anagement
M Information Everyday Life
Accounting/
Technology
Controlling
Crime and Money
Laundering
German Green
Prevention,
Economics Card Bureau/
Assistance,
Guarantee
Roadside
Fund
Assistance
Insurance

VdS Loss
German Green
Prevention
Card Bureau
GmbH

GDV Service Guarantee

Company Fund

as of October 2009
 Publications

144 2009 YEARBOOK

The brochures listed below can be ordered from the “Clip and Clear Future” German insurance
information centre at 0800/7 42 43 75.

From the “Clip and Clear Insurance” series: From the “Future Clip and Clear” series:
n Versicherungen staatlich und privat n Jetzt geht’s los
Sozial- und Individualversicherung Tipps und Infos für Schulabgänger
in Deutschland n Startklar
n Altersvorsorge und Risikoschutz Tipps und Infos für Uniabsolventen
Lebensversicherung – Ihre private Vorsorge n Aufbruch
n Sicherheit für ein langes Leben Tipps und Infos für Existenzgründer
Die neue Rente n Lebenslauf
n Vorsorge mit staatlichen Zulagen Tipps und Infos für Berufstätige und
Die Riester-Rente Jobsuchende
n Vorsorge mit steuerlicher Förderung n Zeit zu zweit
Die Basisrente Tipps und Infos für junge Paare
n Risikoschutz und Existenzsicherung n Einzelausgabe
Die private Berufsunfähigkeitsversicherung Tipps und Infos für Singles
n Attraktiv für Arbeitgeber und Arbeitnehmer n Menschenskinder
Die betriebliche Altersversorgung Tipps und Infos für Eltern
n M
 ehr Sicherheit für Betriebe und Freiberufler n Fortschritt
Versicherungen für Selbstständige Tipps und Infos für Berufsaussteiger
n Mit Sicherheit zum Eigenheim
Versicherungen für Bauherren
n Einbruchschutz für Haus und Wohnung
Sicher ist sicher
n Recht gehabt und auch bekommen
Im Streitfall hilft die
Rechtsschutzversicherung
n Richtig versichert in den Urlaub
Reisen ohne Risiko
n G
 ut gesichert Gutes tun
Sicherheit im Ehrenamt
n Vorsehen statt Nachsehen
Die Unfallversicherung – Ihr Schutz für alle Fälle
n Leichtsinn oder Missgeschick
Private Haftpflichtversicherung – für den
Schaden geradestehen
n Gut abgesichert unterwegs Orders can also be placed over the website
Versicherungen rund ums Auto www.klipp-und-klar.de
 2009 YEARBOOK 145

Appearing together with the

Gesamtverband der Deutschen Versicherungswirtschaft e.V.

“2009 Yearbook
The German Insurance Industry”

is the

“Statistical Yearbook
of German Insurance
2009”.

Statistical Yearbook
of German Insurance
2009
146 2009 YEARBOOK Publications

GDV information on the Internet:

For everyone gdv.de

eigenvorsorge-report.de

For families, teenagers and entrepreneurs,

consumers in general klipp-und-klar.de

For road users versicherung-und-verkehr.de

For accident research and loss prevention unfallforschung-der-versicherer.de

For motor-cyclists besser-bremsen.de

For shippers and carriers tis-gdv.de

For identifying foreign motor insurers zentralruf.de

For theft and burglary protection nicht-bei-mir.de

For households rauchmelder-lebensretter.de

BROADNESS OF VISION

In today’s world, businesses have to contend with

constant change. Their challenge is to come up with
a steady stream of new ideas and find ways to shape
their ever-changing environment.

Being creative on the move requires an open-minded

and positive attitude to new developments.
GDV’s 2009 Yearbook illustrates this challenge, as
well as the insurance industry’s efforts to perceive
changes as they happen, blaze new trails and make
innovation a reality.
Published by:
Gesamtverband der Deutschen Versicherungswirtschaft e.V. (GDV)
(German Insurance Association)
Press and Information Department
Wilhelmstr. 43/43G
D-10117 Berlin
Phone +49 30 20 20 51 17
+49 30 20 20 51 18
Fax +49 30 20 20 66 04
info@gdv.de
www.gdv.de

The German Insurance Association (GDV) is entered in the

­European Commission’s Register of Interest Representatives
(ID No. 6437280268-55)

Distributed by:
Verlag Versicherungswirtschaft GmbH
Klosestr. 22–24
D-76137 Karlsruhe
Phone +49 7 21 35 09 0
Fax +49 7 21 35 09 201

Photo credits:
Frieder Blickle, Hamburg

ISSN-0722-1118

Edited by: Hans Geldmacher and Stephan Gelhausen

Editorial deadline: 27 October 2009
 Gesamtverband der Deutschen Versicherungswirtschaft e.V.

2009 Yearbook
The German Insurance Industry
2009 Yearbook
The German Insurance Industry

Gesamtverband der Deutschen Versicherungswirtschaft e.V.

(German Insurance Association)
ISSN-0722-1118

Wilhelmstr. 43/43G Phone +49 30 20 20 51 17

D-10117 Berlin +49 30 20 20 51 18
Fax +49 30 20 20 66 04
P.O.Box 08 02 64
info@gdv.de
D-10002 Berlin
www.gdv.de