78% of policyholders took some kind of action to compare policies before taking out their current car insurance policy. Many carry out research to ensure they receive fair terms, creating an ideal opportunity to engage with consumers during the renewal process. Despite this, 66% remained with their existing insurer, indicating high levels of customer inertia in the car insurance sector.
65% of Germans say the rising cost of living has made owning a car too expensive, peaking at 77% among those struggling with their finances. Car insurance costs have risen considerably in recent years, with further increases expected. Financially healthy consumers may still manage these expenses, but those struggling are likely to seek ways to reduce costs, underscoring the opportunity to offer flexibility and ways to save.
Gen Zs and Millennials are most likely to switch insurers at renewal. While a trustworthy brand image remains important, insurers should address younger consumers’ need for extra assurance by encouraging friends and family to make recommendations and leveraging customer reviews and trusted social media influencers. Additionally, highlighting the cost-saving benefits of telematics tariffs and the control they provide over premiums can appeal to consumers, particularly younger drivers who face higher premiums.
This report looks at the following areas:
- Market drivers of car insurance, including the German economy, changes in the car market and changing car habits
- Car insurance ownership, including types of coverage
- Behaviour at last renewal, including switching behaviours and activities performed before taking out car insurance
- Direct interaction with insurers, which includes the purpose of contacting an insurer directly and the channel used
- Expected behaviour at next renewal – plans to switch or stay with the current insurer
- Factors important when choosing a policy, such as policy excess amount, general reputation of insurer and customer reviews
- Attitudes towards car insurance
As insurance costs rise, building trust and providing reassurance to policyholders are key. Meanwhile, telematics and electric car insurance offer future growth opportunities.
Venkatesh Modi, Research Analyst, Germany
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EXECUTIVE SUMMARY
- The five-year outlook for car insurance
- Market context
- Germans are driving fewer kilometres
- Graph 1: average annual mileage of passenger cars, 2014-23
- Increasing number of accidents impacts claim costs
- Graph 2: road traffic accidents, 2014-23
- Rise in electric cars prompts insurers to develop new policies
- Graph 3: number of registered pure electric cars, 2021-24
- Mintel predicts
- Increasing claim costs fuel market growth
- Market size & forecast
- Gross written premiums projected to maintain steady growth through 2029
- Opportunities
- Build and maintain trust with a new generation
- Gen Z policyholders prioritise customer reviews when choosing a policy
- Use social media reviews to reassure Gen Z
- Telematics insurance offers growth opportunities
- Showcase electric car insurance to allay concerns about the electric switch
- Simplify the insurance buying process with gen AI chatbots
- Graph 4: consumers who agree that using AI to compare prices of car insurances is appealing, by age, 2024
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MARKET DRIVERS
- The German economy
- Impact of inflation on car insurance
- Changes in the car market
- The growth in the number of cars on German roads is slowing
- Graph 5: number of registered passenger cars as of 1 January, 2015-24
- Rise in electric cars prompts insurers to develop new policies
- Graph 6: number of registered pure electric cars, 2021-24
- Changing car habits
- Gen Zs and Younger Millennials are more likely to access cars in different ways, such as via car sharing and renting
- Graph 7: type of access to car, by generation, 2024
- Adapt insurance to evolving car ownership
- Germans are driving fewer kilometres
- Graph 8: average annual mileage of passenger cars, 2014-23
- Number of accidents is on the rise, affecting claim costs
- Graph 9: road traffic accidents, 2014-23
- Autonomous cars
- Self-driving cars raise difficult questions for the insurance sector
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WHAT CONSUMERS WANT AND WHY
- Car insurance ownership
- Germans prefer annual car insurance, with limited adoption of flexible options
- Gen Zs show varied car insurance ownership
- Graph 10: car insurance ownership, by generation, 2024
- Adapt to the flexible car ownership approach of younger drivers
- Most policyholders have fully comprehensive cover
- Graph 11: level of insurance coverage, 2024
- Younger men are most likely to have fully comprehensive insurance
- Graph 12: level of insurance coverage, by age and gender, 2024
- Behaviour at last renewal
- Just a quarter of consumers switched insurer at their last renewal
- Graph 13: I took out my current car insurance with…, 2024
- Gen Zs and Millennials are more likely to switch
- Graph 14: I took out my current car insurance with…, by generation, 2024
- Most shop around before taking out insurance
- Most consumers shop around before taking out insurance
- Price comparison websites play an important role in the insurance purchase process
- Prominent brands can stand out by avoiding PCWs
- Activities performed before taking out insurance vary across generations
- Graph 15: activities performed before taking out current car insurance, by generation, 2024
- PCWs: highlight personal consultations to appeal to a larger audience
- Encourage recommendations through safe driving challenges
- Increase engagement with Gen Zs and Younger Millennials through influencers…
- …but collaborate with finfluencers when providing expert advice
- Direct interaction with insurers
- Given the limited interaction with insurers, providing excellent customer support and experience will be crucial for customer retention
- Graph 16: purpose of direct contact with a car insurer in the last three years, 2024
- Increase touch points to enhance perceived value
- Enhance the process of making policy changes for those aged 25-34
- Graph 17: policyholders who contacted their insurer directly to make changes to their policy, 2024
- Emphasise the simplicity of making claims digitally to reassure Gen Zs and Millennials
- Allianz Direct demonstrates how consumers can effortlessly file a claim using their smartphone
- Highlight cost-saving potential and the convenience of bundling insurance policies to appeal to Gen Zs and Millennials
- Graph 18: policyholders who contacted their insurer directly to inquire about another insurance policy, by generation, 2024
- Most policyholders prefer to contact insurers through phone and email
- Graph 19: preferred ways to contact a car insurer directly, 2024
- Highlight human assistance to reassure consumers
- Graph 20: policyholders who contacted a car insurer directly via phone or in-person in the last three years, by age, 2024
- Make WhatsApp a one-stop contact solution for young policyholders
- Expected behaviour at next renewal
- More consumers will switch insurers than those who plan to do so
- Graph 21: when it’s due for renewal, I plan to take out my car insurance with…, 2024
- Younger policyholders exhibit an intention to switch
- Graph 22: when it’s due for renewal, I plan to take out my car insurance with…, by age, 2024
- Factors important when choosing a policy
- Policyholders value insurer reputation
- Graph 23: factors important when choosing a policy, 2024
- Assist consumers in preparing for financial emergencies related to car insurance
- Prioritise creating and sustaining a trustworthy brand reputation
- Baby Boomers rely on brand shortcuts, while Gen Zs seek additional reassurance through customer reviews and personal recommendations
- Graph 24: factors important when choosing a policy, by generation, 2024
- Leverage customer reviews to enhance brand perception among Gen Zs
- Graph 25: policyholders who consider customer reviews to be an important factor when choosing a policy, by generation, 2024
- Neodigital posts positive customer reviews on its Instagram page
- Highlight speed of processing claims to give consumers peace of mind
- Attitudes towards car insurance
- Telematics insurance shows growth potential
- Highlight how electric car insurance can help address common consumer concerns
- Use gen AI chatbots to simplify the insurance buying process
- Graph 26: consumers who agree that using AI to compare prices of car insurances is appealing, by age, 2024
- Using AI in claims processing may be a sensitive matter
- Graph 27: AI can be trusted to handle car insurance claims, by age, 2024
- Dashcams can be an alternative to tracking apps or telematics devices for younger policyholders
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LAUNCH ACTIVITY AND INNOVATION
- Allianz offers a two-year price guarantee for new contracts
- VHV introduces a new policy for young drivers relying on others’ cars
- R+V starts car valuation for free
- Neodigital introduces telematics tariff
- R+V offers specialised insurance for car subscription drivers
- Advertising and marketing activity
- DEVK promotes car insurance at Carerra Racing Night
- Check24 highlights the simplicity of switching insurers on its platform
- Allianz ad conveys the speed of resolving claims
- DEVK highlights in-person support at its branches
- Aviva UK tackles consumer concerns about EVs while promoting its insurance
-
MARKET SIZE AND FORECAST
- Car insurance inflation exceeds overall inflation rate
- Graph 28: Germany, Price index, January 2021-September 2024
- 2024 sees a significant rise in gross written premiums
- Graph 29: gross written premiums, 2020-24
- Gross written premiums projected to maintain steady growth through 2029
- Rising claim costs drive market growth
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APPENDIX
- Appendix – products covered, generations, abbreviations, consumer research methodology and language usage
- Products covered in this Report
- Generations
- Abbreviations
- Consumer research methodology
- A note on language
- Appendix – market size and central forecast methodology
- Forecast methodology
- Forecast methodology – fan chart
- Market size – value
- Market forecast and prediction intervals – value
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