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Life insurance: Corona-related cancellation wave in insurance? The industry is really that bad message

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, Life insurance: Corona-related cancellation wave in insurance? The industry is really that bad message, Forex-News, Forex-News


, Life insurance: Corona-related cancellation wave in insurance? The industry is really that bad message, Forex-News, Forex-News

The pension scheme is most often cut

There is no investment in an economic crisis – not even in old-age provision. A representative survey conducted by INSA Consulere for the German Institute for Pensions (DIA) in May this year confirms that the money is instead held: 19 percent of households that had lower incomes in March and April 2020 due to the pandemic canceled or, according to their own statements, cut retirement provisions. This is the worst hit among insurance companies.

The Federal Association of German Insurance Merchants (BVK) asked its members about the state of their business – the result of the survey was that the legislature had to act due to “alarming figures”.

Some insurers and intermediaries therefore expected up to three or four times as many cancellations in the Corona months as in the previous year, the investment.

Cancellation prevention: deferral programs

Cancellations are not without consequences: They result in considerable financial losses for insurers as well as for the approximately 40,000 German brokers and insurance brokers. Agents and brokers normally have to pay the contract commission back to the insurer in the event of cancellation or sometimes even exemption from premium. It is therefore easy to imagine how quickly corona-related cancellations could lead to economic difficulties.

In order to keep customers, according to Blau Direkt, deferral programs for cancellation prevention have been set up by almost all insurers. The programs also relieve affected agents and brokers.

Only one percent more cancellations

In order to evaluate the situation of the insurers, Blau Direkt compared the cancellation numbers of the German life insurance companies from January to May 2020 with those from the previous year 2019.

The results are surprisingly positive: According to the evaluation, a total of 1912 policies were canceled in 2019, compared to 2561 policies canceled in 2020. The number of additional 493 deferred contracts has not increased since mid-April. In addition, the first payments were apparently resumed in May.

Blau Direkt writes in a press release that there would be no problem even if all deferred policies failed permanently – the figures have to be compared with the sales development “and with a whopping plus of 58% it is clearly above the previous year.” For a constant cancellation rate, 58 percent more policies would have to be canceled accordingly. CFO Kerstin Möller-Scholz from Blau Direkt is quoted in a press release as follows: “In fact, in the worst case scenario, we would have 59 percent more cancellations than in the same period last year. Despite the corona crisis, that would be only one percent more” than the increase in sales.

Deferred policies are reactivated

In line with the fact that the first deferrals were lifted in May, Möller-Scholz predicts further reactivations of deferred policies and is quoted again in the press release: “This means that the final cancellation rate will decrease significantly contrary to expectations. This is sensational news . ”

Insurers and brokers can breathe a little easier, because the worst is obviously behind them. How the situation will develop over the course of the year, however, cannot be predicted exactly, according to Blau Direkt, and remains to be seen.

Olga Rogler / editors Forex-news.com.net

Image sources: Shutter_M / Shutterstock.com



, Life insurance: Corona-related cancellation wave in insurance? The industry is really that bad message, Forex-News, Forex-News

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