The Insurance Disputes Law Review: Germany


The German insurance market contributes substantially to Germany's prosperity and economic growth. With over €202 billion in premium income in 2018, the insurance industry is one of the highest turnover sectors in Germany. It is one of the 10 biggest insurance markets worldwide and the second biggest reinsurance market after the US. In 2018, over 438 million insurance contracts were taken out. Although the current coronavirus pandemic is presumed to lead to heavy losses of the insurance market in 2020, the long-term trend of growth is expected to continue.

In this context, the effective and cost-efficient settlement of insurance disputes is an important driver for the industry's success. It ensures legal certainty and fosters trust in the sector. The following chapter gives an overview of the legal framework for insurance disputes in Germany and highlights the current jurisprudence of German courts.

The legal framework

i Sources of insurance law

The Insurance Contract Act

The main source of insurance law in Germany is the Insurance Contract Act (VVG). It sets out the general rules for insurance contracts as well as the statutory provisions for specific insurance branches. The VVG applies to all types of insurance contracts, except for reinsurance and maritime insurance contracts (Section 209 VVG). It came into force in 1908 and remained largely unchanged until a major reform in 2008. The objective of the reform was to modernise German insurance law and improve the position of the insured person.

Important changes included:

  1. the introduction of a right to revoke the insurance contract by the policyholder within 14 days of the conclusion of the contract (Section 8 VVG);
  2. the introduction of certain advisory, documentation and information duties of the insurer (Section 6 et seq. VVG);
  3. the abolition of the 'all-or-nothing' principle in favour of the 'more-or-less' principle (Sections 26(1), 28(2), 81(2) VVG);
  4. the abolition of insurance-specific limitation periods, rendering applicable the general limitation period of three years pursuant to Section 195 of the German Civil Code (BGB); and
  5. the introduction of a new place of jurisdiction at the place of the policyholder's residence (Section 215(1) VVG).

The overarching purpose of the reform was to provide greater protection to the insured person by setting out restrictions to the freedom of contract. The restrictions shall, however, not apply to large risks and open policies. Large risks are risks of: (1) certain transportation and liability insurances (such as insurances for railway vehicles, aircraft or the transportation of large goods); (2) certain credit and suretyship insurances; and (3) certain property, liability and other indemnity insurances where the policyholder exceeds a balance sheet total of €6.2 million, a net turnover of €12.8 million or an average of 250 employees per fiscal year. These insurances are typically taken out by big companies that are not in need of protection by the VVG. All other risks are deemed 'mass risks', to which the restrictions to the freedom of contract apply without limitation.

German Civil Code

Another source of German insurance law is the German Civil Code (BGB), which is applicable insofar as no specific provisions of the VVG apply. The area of most relevance for insurance contracts is its section on the use of standard business terms. Almost all insurance contracts contain standard business terms of the insurer, especially insurance contracts concluded with a consumer. Section 305 et seq. BGB set out the rules for the incorporation of standard business terms into the contract, the assessment of their effectiveness and the interpretation of their content. These rules apply regardless of whether the other party is a consumer or not. However, stricter requirements apply where a consumer is concerned.

Other provisions applicable to insurance law are the rules on the statute of limitations. As the special limitation periods for insurance claims were abrogated with the VVG reform in 2008, the general rules in Section 195 et seq. BGB apply. The limitation period is three years, commencing at the end of the year in which the claim arose and the insured party obtained knowledge of the circumstances giving rise to the claim (or would have obtained this knowledge if it had not shown gross negligence). An exception applies if the limitation period is suspended. For insurance contracts, Section 15 VVG provides an insurance-specific suspension rule. Where a claim arising from an insurance contract has been registered with the insurer, the limitation period shall be suspended until such time as the applicant has received the insurer's decision in writing. All other rules for suspension are set out in Section 203 et seq. BGB.

German Code of Civil Procedure

A further source of German law that is especially relevant for insurance disputes is the German Code of Civil Procedure (ZPO). It sets out the general rules for litigation proceedings and is also applicable to insurance disputes as far as no specific rules are set out in the VVG.

One of the main principles of German civil procedural law is that each party has to present the facts and prove the case upon which its claim or defence is based. Unlike in common law jurisdictions, there is no pretrial discovery or document production. In general, no party to litigation proceedings is therefore obligated to deliver to the other party the documents or evidence necessary for its case. However, there are exceptions to this principle. One example is Section 142 ZPO, which sets out that the court may direct one of the parties or a third party to produce records or documents, as well as any other material in its possession if one of the parties made reference to it. Another example is Section 422 ZPO, which stipulates the obligation of a party to produce certain documents favourable for its opponent if its opponent is entitled to demand the surrender or production of the relevant documents pursuant to civil law stipulations.

With regard to insurance disputes, the VVG stipulates specific disclosure obligations of the insured person. According to Section 31(1), the insurer may, after the occurrence of an insured event, demand that the policyholder or the beneficiary shall disclose all the information necessary to establish the occurrence of the insured event or the extent of the insurer's liability. In addition, the insurer may demand supporting documents to the extent that the policyholder may be reasonably expected to obtain them. The policyholder is even obligated to disclose facts unfavourable to him or her. The VVG therefore sets out more extensive disclosure obligations of the insured person than it would have under the rules of the ZPO. However, Section 31 VVG does not set out any consequences for cases of non-compliance. Therefore, the insurer will usually incorporate the policyholder's disclosure duties in its general terms and conditions and stipulate contractual consequences for non-compliance.

Another specific aspect of insurance disputes concerns direct claims of third parties against the insurer. This issue typically arises in relation to liability insurances that cover damage claims made by third parties against the policyholder. In general, a third party cannot make direct claims under the insurance contract against the insurer of the damaging party. Therefore, the third party may only enforce its damage claim against the policyholder (a 'liability claim') who may then raise a claim against his or her insurer (a 'coverage claim'). However, there are exceptions to this rule. One is set out in Section 115 VVG, which provides a direct claim of the third party against the insurer if: (1) third-party vehicle insurance is concerned; (2) the policyholder has become insolvent; or (3) the policyholder's whereabouts are unknown. If one of these requirements is fulfilled, the third party may directly claim payment from the insurer and initiate court proceedings against it without having to proceed against the policyholder first.

The ZPO also stipulates the place of jurisdiction for litigation proceedings regarding claims in connection with the insurance contract. Optional places of jurisdiction are the place of the insurer's registered seat, the place of performance of the contract or the place of the insurer's branch office. In general, all these venues favour the insurer. With the introduction of Section 215 VVG in 2008, the legislator established a new place of jurisdiction that favours the insured person. The policyholder can now also choose to proceed against the insurer at the court in whose district he or she has his or her place of residence. For actions brought against the policyholder, only this court shall have jurisdiction. The parties can only deviate from this place of jurisdiction to the detriment of the policyholder after the dispute has arisen or if the policyholder moves his or her domicile to a different country after signing the contract or if his or her domicile is unknown at the time the action is filed. The purpose of this change was to guarantee the policyholder access to a court near his or her domicile. This was supposed to compensate for the subject-specific and economic advantages of the insurer.

ii Insurance regulation

German Insurance Supervision Act

The main legal source for insurance regulation is the German Insurance Supervision Act (VAG), which implemented in 2015 the European Solvency II Directive. It enables the supervision of insurance companies in their legal and financial operations (Section 294(2) VAG) by the German Federal Financial Supervisory Authority (BaFin) and the supervisory authorities of the federal states. The BaFin is the competent supervisory authority for private insurance companies that operate in Germany and are of material economic significance as well as for public insurance companies that participate in free competition and operate across the borders of any federal state (Section 320 VAG). The supervisory authorities of the federal states are mainly responsible for overseeing public insurers whose activities are limited to the federal state in question and private insurance companies of lesser economic significance.

Therefore, all private and public insurance companies, pension funds and reinsurers carrying out private insurance businesses within the scope of the VAG and that have their registered office in Germany are subject to supervision. Social insurance institutions are not supervised under the VAG but regulated by other government agencies.

The primary objective of the VAG is the protection of policyholders and beneficiaries (Section 294(1) VAG). To ensure that only regulated companies offer insurance services, insurance companies must acquire a licence before commencing business operations (Section 8(1) VAG). To be granted authorisation to operate, the insurance company must fulfil a number of requirements. This includes, inter alia, that the company:

  1. operates in the legal form of a public limited company;
  2. has its legal seat in Germany;
  3. engages only in insurance businesses and directly related businesses and observes the principle of business segregation (e.g., a life insurance company may not at the same time provide health or property insurance);
  4. submits a detailed business plan that contains the company's charter and sets out which insurance segments will be operated as well as the risks that are intended to be covered;
  5. demonstrates that it has a sufficient amount of its own funds as well as sufficient resources to develop the business and sales organisation; and
  6. has at least two members of the management board that are 'fit and proper' persons.

In its ongoing supervision, the BaFin monitors, among other things, whether the insurance company complies with all statutory and regulatory requirements, whether it is capable of fulfilling its insurance contracts and whether it observes the principle of good business practice (e.g., keeping proper accounting records and rendering proper accounts). In accordance with the Solvency II Directive, it also supervises the company's solvency, in particular the fulfilment of certain capital requirements.

In the event of any undesirable conduct by an insurance company, especially non-compliance with legal requirements, the BaFin may take any appropriate and necessary measures to prevent or eliminate this conduct (Section 298 VVG). For consumers, it is also possible to file a complaint against an insurance company with the BaFin. The BaFin will review the complaint and issue a report with its legal opinion. If necessary, it may also take regulatory steps against the insurance company. However, it is not authorised to render a binding decision or give legal advice.

iii Insurable risk

German insurance law differs between two types of insurable risks: socially insured risks and privately insured risks. Socially insured risks are codified in the German Social Code (SGB), which distinguishes between health insurance, unemployment insurance, nursing care insurance, pension insurance and occupational accident insurance. They are statutory insurances that do not come into effect by agreement but are taken out by law when the insured person fulfils certain requirements.

The VVG only applies to privately insured risks. Because of the freedom of contract, the parties to an insurance contract may, in principle, insure any type of risk they chose to. They are only bound by the limitations applicable to any civil law contract (e.g., the prohibition of contracts that violate public policy or a statutory prohibition). The VVG regulates the most common types of private insurance in Germany by stipulating the rules applicable to the different insurance branches. The most relevant branch in Germany is the liability insurance that insures damage claims of a third party against the policyholder. In 2018, about 83 per cent of German households had taken out private liability insurance and 81 per cent third-party vehicle insurance. What is special about this insurance branch is that some liability insurances are on a voluntary basis while others are compulsory insurances. This is the case where the legislator deemed it especially important to insure the risk of damages to a third party caused by the conduct of another party. The most prominent example of compulsory liability insurance is the third-party vehicle insurance, from which the other compulsory insurances evolved. Other insurance branches stipulated in the VVG are legal expenses insurance, transport insurance, fire insurance for buildings, life insurance, occupational disability insurance, accident insurance and private health insurance.

iv Fora and dispute resolution mechanisms

In general, arbitration and other alternative dispute resolution mechanisms (ADR) have experienced an expansion in recent years. In Germany, however, the popularity of arbitration and ADR rather depends on the type of insurance contract concerned. A distinction can be drawn between reinsurances, insurances for commercial and industrial risks and insurances for mass risks.

Disputes regarding reinsurances are traditionally solved amicably between the parties. The reason for this is a kind of 'gentlemen's agreement' to solve reinsurance disputes by negotiations for amicable settlement. However, arbitration proceedings have become more and more common in the past 30 years and most reinsurance contracts now also contain arbitration clauses. This may be attributed to an increased willingness in the Anglo-American reinsurance market to refer reinsurance disputes to arbitration, which also reflects on the German market. Another reason might be the increase of disputes regarding large risks that involve higher stakes for the parties. A third factor may be that more reinsurance companies withdraw from the reinsurance market, making it less necessary to solve disputes amicably to retain ongoing business relationships.

In insurance disputes concerning commercial and industrial risks there is a rather restrictive use of alternative dispute resolution mechanisms, especially arbitration. This is a distinctive aspect of German insurance law in comparison to other jurisdictions. It might be owing to the still widely held perception by German insurers that German court proceedings are, when compared to other jurisdictions, more efficient, less time-consuming and less costly. Furthermore, German courts regularly have specialised chambers that will hear insurance law-related disputes. This ensures a qualified legal judgment that otherwise only specialised arbitral tribunals might be able provide. Benefits of this kind in German court proceedings apparently still outweigh the general advantages of arbitration for many insurance companies. However, there is reason to believe that the use of arbitration clauses in commercial or industrial insurance contracts will increase in the future. For contracts that are related to international law or written in a foreign language, or for contracts that contain unusual clauses or concern risks of a high technical nature, arbitration proceedings may, in principle, be deemed more favourable.

In German insurance contracts concerning mass risks, arbitration clauses are basically non-existent. This is owing to the fact that they are often concluded with 'consumers' under German consumer protection law, which significantly raises the bar for a valid arbitration agreement. Section 1031(5) ZPO states that arbitration clauses involving consumers are only valid if they are contained in a separate record or document signed by both parties that shall not contain agreements other than those making reference to the arbitration proceedings. If the arbitration agreement is included in a contract, it is only valid if it has been recorded by a notary. Both requirements are rather difficult to fulfil in practice. In addition, arbitration clauses in insurance contracts are usually part of the insurer's general terms and conditions and therefore have to fulfil the requirements set out in Section 305 et seq. BGB (see above under Section II(i) BGB). This leads to a high risk that an arbitration clause contained in an insurance contract for mass risks could be deemed invalid by a court.

Because of these difficulties with arbitration proceedings against consumers, the German Insurance Association formed the association Versicherungsombudsmann eV (the Insurance Ombudsman Association) in 2001 to establish a mechanism for out-of-court dispute settlement of insurance disputes with consumers before an 'insurance ombudsman'. Under this mechanism, consumers may file a complaint against an insurance company (or an insurance broker) with the ombudsman. To be able to refer an insurance dispute to the ombudsman, the insurer needs to be a member of the Insurance Ombudsman Association, which almost all insurance companies in Germany are. The complaint is only admissible if the insured person has made a complaint with the insurance company first and if at least six weeks have passed since then. The ombudsman cannot decide on complaints that: (1) have a value of more than €100,000; (2) concern healthcare or nursing care insurance; (3) have already been filed with or decided by a court or another institution (unless the court has ordered, in accordance with Section 278a(2) ZPO, that court proceedings shall be stayed); or (4) are obviously unfounded. The proceedings shall take no longer than 90 days. The insured party may refer the dispute to an ordinary court at any time. If the complaint is admissible and the value in dispute is no more than €10,000, the ombudsman can render a decision that is binding for the insurance company; otherwise, it can make a non-binding recommendation. Dispute settlement before the insurance ombudsman has proven to be quite successful. In 2019, the Insurance Ombudsman Association received 17,528 complaints, of which 13,006 were admissible, and settled 13,309 disputes.

Recent cases

i Judgment of European Court of Justice dated 19 December 2019, case no. C-355/18, C-356/18, C-357/18, C-479/18 regarding the right of cancellation of policyholders under the Solvency II Directive

A number of recent judgments of the European Court of Justice (ECJ) clarified the cancellation rights of life insurance policyholders under the European Solvency II Directive. Although the judgments concern Austrian insurance law, they are also of general importance for other European jurisdictions.

The judgments follow the Endress decision of the ECJ of 2013, which decided on the compatibility of a former provision of the VVG with European law. The respective Section 5a VVG limited the right of the policyholder to cancel its rights under the insurance contract to a period of one year from payment of the first insurance premium, even if the policyholder had not been informed of its right of cancellation. The ECJ declared Section 5a VVG incompatible with European law. However, the decision left open whether incorrect cancellation instructions and omitted or incorrect other consumer information also led to an (unlimited) extension of the cancellation periods. For insurance contracts under German law, the Federal Court of Justice (BGH) had repeatedly confirmed this.

The ECJ now ruled with its recent decisions of December 2019 that under the Solvency II Directive, an unlimited right of cancellation exists, but only in case the incorrect or omitted information restricted the policyholder in exercising its right to cancel the contract.

Furthermore, and in conformance with the jurisprudence of the BGH, the EJC ruled that the policyholder remains entitled to exercise its right of cancellation even after the contract has been terminated, provided that the governing law of the policy does not provide for something different.

Lastly, the ECJ held that the legal consequences of a cancellation of the insurance contract should not limit the policyholder's decision in making use of its right, meaning that it was not compatible with EU law if the policyholder only received the surrender value of the insurance policy in the event of its cancellation. This is contrary to the current jurisprudence of the BGH, according to which an insurer may credit substantial or complete fund losses against an unjust enrichment claim of a policyholder if it cancels its unit-linked life assurance.

In conclusion, the decisions of the ECJ are in line with a number of judgments of the BGH, but it also came to different conclusions regarding certain other aspects. It, therefore, remains to be seen how these judgments of the ECJ will impact the jurisprudence of German courts in the future.

ii Judgment of BGH dated 4 March 2020, case no. IV ZR 110/19, regarding the insured's right to claim insurance coverage in case of bankruptcy of the policyholder

In a recent judgment of March 2020, the BGH had to decide on a coverage claim of the insured person under a D&O insurance policy that the insurer had denied due to the fact that the policyholder's liquidator had not yet chosen to perform the insurance contract under Section 103 German Insolvency Code (InsO).

Section 103 InsO provides that if a mutual contract was not (completely) performed at the time the insolvency proceedings were opened, the insolvency administrator may choose to perform the contract or deny performance. As long as the insolvency administrator has not yet exercised its right, the other party may not claim performance.

The BGH confirmed the insured person's right to claim coverage regardless of whether the liquidator had chosen performance or not. It set out that the D&O insurance is an insurance for the account of a third party in accordance with Section 43 et seq. VVG. This means that the rights under the insurance contract are for the benefit of the insured, but the right of disposal regarding the insurance contract remains with the policyholder. Therefore, if the policyholder files for bankruptcy, the right of disposal is usually transferred to the liquidator (Section 80(1) InsO). In such a case, the BGH stated, the insured person can in general only claim its rights under the insurance contract if the liquidator decides to execute the contract, hence by paying the insurance premium.

However, in the case at hand the insurance policy explicitly stated that only the insured person may claim insurance coverage under the policy. The BGH, therefore, held that this modified the statutory provisions in such a way that the insured person was not only entitled to the insurance claim but also had the right of disposal regarding this claim. Hence, the claim did not form a part of the policyholder's bankruptcy estate and the insured person could claim (provisional) coverage regardless of whether the liquidator had exercised its right to perform the insurance contract or not.

iii Judgment of OLG Düsseldorf dated 13 December 2019, case no. 4 U 23/18, regarding availability of excess coverage when the underlying insurance coverage has been exceeded

The Higher Regional Court of Düsseldorf (OLG Düsseldorf) had to decide on the availability of an excess D&O insurance in case the insurance conditions provided that it was only available after the primary insurance was exhausted. This decision is of particular importance as it is one of the few judgments concerning the relationship between excess coverage and primary insurer.

In the case at hand, the insured persons had been ordered to pay damages to its former employer for breach of duty. Subsequently they had claimed indemnification from the primary D&O insurer. The damage claim itself had remained below the insurance sum. With interest payments and defence costs, it exceeded the insured amount. The insured persons, the injured company and the primary insurer concluded a settlement agreement for payment of an overall amount below the insurance sum, including defence costs and interest. After the insured persons had transferred its insurance claims to the company, the company claimed payment of the remaining amount of its damage claim from the excess insurer.

The OLG Düsseldorf held that the company could not raise insurance claims under the excess insurance as the insurance sum of the primary insurance had not been exhausted by the settlement payment. In addition, the parties had explicitly settled the claim only in the amount of the settlement payment, not in the amount of the full insurance sum.

The court held further that even if the parties had agreed to settle in the amount of the insurance sum, the primary insurance would not have been exhausted as the actual damage claim had remained below the insurance sum. According to the OLG Düsseldorf, this applied regardless of a provision in the insurance conditions of the primary insurer which stated that only compensation payments for the liability claim and defence costs would count towards the insurance sum.

Some voices in legal literature argue that such a provision is in breach of Section 101(2) VVG, which provides that the insurer must also bear defence costs and interest for late payment if the insured sum has already been exhausted for the indemnification of the policyholder; however, the OLG Düsseldorf concluded that it did not have to decide on the validity of the respective provision as even if the defence costs would have counted towards the insurance sum, it would not have been exhausted.

In addition, the OLG Düsseldorf held that neither the interest payments could have exhausted the insurance sum. The contractual provision did not provide for a set-off of default interest from the insured amount as it did not explicitly say so. According to settled case law, it is not sufficient for a waiver under Section 101(2) VVG if the set-off of interest is merely not mentioned in a clause. Hence, the OLG Düsseldorf concluded that even if the set-off clause in the insurance conditions applied, the insurance sum would not have been exhausted and the excess coverage was, therefore, not available.

iv Court order of OLG Hamm dated 19 August 2019, case no. I-8 W 6/19, regarding the admissibility of a third party intervention of D&O insurers in the liability proceedings against the insured person

The Higher Regional Court of Hamm (OLG Hamm) decided with court order of 19 August 2019 that in the case of a D&O insurance, the insurers may intervene in the liability proceedings against the insured person in its support. In the case at hand, a company (i.e., the policyholder) had raised damage claims against its former supervisory board members (i.e., the insured persons) for breach of duty. The D&O insurers had requested to intervene in the proceedings as third parties in support of the insured persons.

Under German civil procedural law, a third party intervention is only admissible where the third party has a legitimate interest in the outcome of the proceedings, under Section 66(1) ZPO. The OLG Hamm confirmed the admissibility of the insurers' third party intervention, stating that the D&O insurers had a legitimate interest to intervene in the proceedings due to the binding effects of the liability proceedings on the later coverage proceedings.

It further held that nothing different applied where the insurer had a contractual right to conduct the proceedings on behalf of the insured person as such a right was something substantially different to a third party intervention. Hence, the insurer was free to choose whether it conducted the proceedings on behalf of the insured person or intervened in it as third party.

This is particularly relevant where the insurer assumes that the company has no real intent to pursue its claim against the insured person, but only initiated court proceedings to access the insurance coverage (known as a 'friendly claim'). In such a case, the insurer has a legitimate interest to not only conduct the proceedings on behalf of the insured person but to take influence on its outcome as a third party. Only in this role it will be able to raise additional arguments against the claim that differ from the ones raised by the insured person (as long as they do not conflict).

The international arena

Cross-border insurance contracts have proliferated in recent years, putting insurance disputes increasingly into a more international context. Frequent questions that arise in cross-border insurance disputes regard the correct place of jurisdiction and the applicable law. For German courts, EU Regulation (EC) No. 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) and EU Regulation (EC) No. 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (the Recast Brussels Regulation) set out the relevant rules for these questions.

Rome I applies to insurance contracts concluded after 17 December 2009 and provides the rules to identify the applicable law to contractual obligations in civil and commercial matters involving a conflict of laws. Article 7 Rome I sets out specific rules for insurance contracts covering large risks as well as insurance contracts covering mass risks situated inside the territory of the Member States. To all other insurance contracts, especially regarding mass risks situated outside the territory of a Member State as well as reinsurance contracts, the general rules of Article 3–6 Rome I apply.

Regarding the question of jurisdiction, the Recast Brussels Regulation provides the relevant rules for legal proceedings instituted on or after 10 January 2010 against a defendant that has its domicile in a Member State and concern a dispute that is not located solely in one Member State (e.g., one of the parties has its residence or place of business in one Member State and the other party in another Member State or a third state). It contains specific rules for insurance disputes in Articles 10–16. The rules are similar to those under German law (see Section II.i, 'German Code of Civil Procedure'). If the defendant has its residence in Switzerland, Norway or Iceland, the Lugano Convention (2007) applies with corresponding rules.

The Recast Brussels Regulation also applies to the enforcement of judgments rendered by a court of a different Member State. In general, such judgments shall be recognised and enforceable in the other Member State without any special procedure or declaration of enforceability being required. However, the Recast Brussels Regulation does not apply to the enforcement of arbitral awards. Regarding the recognition and enforcement of foreign awards by a German court, the rules of the Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) apply. Regarding the recognition and enforcement of domestic awards, the rules of the ZPO apply.

Trends and outlook

The current covid-19 pandemic has also taken its toll on the insurance market. Although the impacts from covid-19-related claims under general insurances are expected to be limited as pandemics are usually excluded under common insurance policies, several German courts have already decided on the question of whether the novel coronavirus is an insured risk under business interruption insurance policies. Further disputes in this regard are to be expected, and their outcome remains to be seen.

There are also other obstacles the industry is facing. The duty for companies to file for insolvency is currently suspended in Germany until 31 December 2020. However, a wave of insolvencies is anticipated as soon as the suspension is lifted. This will not only lead to higher defaults among credit and guarantee insurers but also result in a large decrease in insurance premium earnings. Losses of around €360 trillion in premiums worldwide are predicted for 2020. The dooming economic recession is additionally putting insurers under pressure.

However, the decline in growth is already expected to be short-lived. The pandemic has also led to a demand in new insurance policies, in particular such that cover risks in relation to the pandemic. It, therefore, remains to be seen how the insurance industry will adapt to the new challenges and what long-term trends they will bring.


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