Claims settlement and drug costs are rising. Therefore, prices are likely to increase, the actuaries explain.
The high rate of inflation will also affect insurance costs. The German Association of Actuaries (DAV) said on Monday that rising construction prices would have an impact on residential building insurance, while car insurance premiums should rise due to high repair costs. The increase in drug production costs could also increase the costs of private health insurance, explained DAV vice president Maximilian Happacher. The DAV is the professional association of actuaries.
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Another problem arises in life insurance: If you want to insure your standard of living in old age, you need to save more money when inflation rates are high, Happacher says. Interest rates are also rising, but so far they haven’t been enough to offset the loss in purchasing power due to inflation: “The real interest rate is more negative than ever,” Happacher said.
consequences of the corona pandemic
The corona pandemic, on the other hand, does not have a direct impact on life insurance at the moment, DAV CEO Herbert Schneidemann explained. Last year there were more than a million deaths in Germany for the first time since 1946, and mortality had already increased in 2020, in part due to the coronavirus pandemic. However, the figures were still within the fluctuation range already considered in life insurers’ calculations.
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So far, there has been no significant increase in the number of disability insurance cases due to the pandemic. Although “one case or another, especially in the psychological area, is recognizable,” Schneidemann said. In many cases, however, it is difficult to say whether infection with the virus or psychological problems resulting from long periods of part-time work led to the inability to work. An overlap of corona infection with pre-existing physical or mental illnesses can often be observed.
Infection is not a reason for denial of insurance
Prior coronary disease is not in itself a reason to deny clients disability insurance or private health insurance, Schneidemann stressed. “However, like all of the above conditions, it must be indicated in the application process and may result in premium surcharges or benefit exclusions.”
It’s unusual to ask about vaccination status before buying insurance, Schneidemann said. Although vaccination against the coronavirus reduces the risk of serious illness, he does not consider such consultations appropriate. “Otherwise, insurers would have to ask for check-ups and other preventive measures, for example. I don’t think it makes sense to pick just one criteria now.”