Insurance Industry Records Record Hail Damage

The German insurance industry reflects on an expensive year 2023, in which insured damages caused by natural forces – particularly by hail – have risen to 5.7 billion euros. An increase of a remarkable 1.7 billion euros compared to the previous year marks the main burden of costs incurred for motor vehicles. The previous peak was recorded in 2021 at 13.9 billion euros, as explained by Jörg Asmussen, the Chief Executive of the German Insurance Association (GDV). Contrary to initial forecasts, the actual damages turned out to be higher than assumed at the end of last year. This underscores a long-term statistic that began in the early 1970s. The greatest share of damage was caused by storms in August 2023, with damages amounting to 1.5 billion euros. June also saw significant burdens for the insurers, while the following months lacked severe storm damages. Bavaria is at the forefront of affected areas with over two billion euros in reported damage claims, followed by Hesse with 890 million euros. Jörg Asmussen emphasized the particular impact on the Alpine region and the Hessian uplands by hailstorms. In motor vehicle insurance, average damage amounts of 4,100 euros for storm and hail damages were recorded, representing the third-highest value in history. Reasons for the high cost expenditures include price increases for spare parts and workshop wages, among others. Besides the material damages, current debates have not been absent. The discussion about a mandatory insurance for elemental damage is gaining momentum, with the state premiers planning to discuss this with Chancellor Olaf Scholz next month. However, Asmussen sees the solution more in an adjustment of the building regulations and in climate protection. In conclusion, the spotlight is on the increased density of insurance that now covers 54 percent of all residential houses against natural hazards – an increase of two percentage points compared to the previous year.