Prospective optimism prevails among German insurance firms.
German insurers are navigating the unprecedented challenges posed by the COVID-19 pandemic by accelerating their digital transformation and increasing their focus on sustainability.
Digital Processes
The pandemic has exposed the limitations of Germany’s traditionally complex and decentralized bureaucratic systems, including in public sector and health insurance administration. To maintain service during lockdowns and social distancing, insurers have been accelerating digital workflows, customer self-service platforms, and remote claims processing.
The German government’s renewed approach to digitalisation, including the creation of a dedicated digital ministry, reflects a broader push that benefits insurers by improving the digital infrastructure and administrative coordination necessary for efficient insurance services.
Sustainability Focus
Although the search results do not explicitly detail German insurers’ sustainability initiatives during the pandemic, the global insurance market context shows escalating climate risks as a critical concern. As a result, insurers are likely aligning with these trends by integrating environmental, social, and governance (ESG) criteria into underwriting and investment decisions, recognising sustainability as a key factor in long-term risk mitigation.
Major Challenges
Insurers face several significant challenges, including rapidly evolving risks heightened by COVID-19, such as mental health issues and systemic economic pressures. The pandemic has also emphasised the need for digital process overhaul amidst a traditionally fragmented system, risking inefficiencies and slower adaptation relative to other countries.
The global insurance market context is volatile, with geopolitical and systemic risks, cyber threats, and climate-driven natural catastrophes creating complex underwriting environments. Post-pandemic economic conditions and regulatory changes continue to impact German insurers’ operational frameworks and customer engagement models.
Industry Outlook
A PwC survey of 112 industry leaders in June 2021 revealed that the sentiment among German insurers averages a 7.0 on a scale of 1 to 10. The survey also showed that 54% of leaders see their company as poorly or very poorly positioned in the area of artificial intelligence, with only 34% rating it as good.
43% of leaders are concerned about a future shortage of qualified employees in the insurance industry. Only 63% of leaders rate their company's handling of new technologies as good. However, 78% of leaders see their company as well-positioned in sustainable topics.
54% of the surveyed leaders expect the industry's mood to improve in the next six months. Around 40% of leaders think their company needs to do more to implement systems and broaden their philosophy in sustainable topics.
Mathias Röcker, Head of Insurance at PwC Germany, states that confidence in the industry is growing due to vaccination progress and easing of lockdown measures. Companies in the insurance industry are focusing more on digital processes and sustainability, as per the survey.
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