German insurance sector sentiment during Q1
Insurers' Sentiment Decreases in Germany During Q1 2025
The business sentiment of insurers in Germany has declined at the onset of 2025, as indicated by the German Insurance Association (GDV). According to the Ifo Institute's economic survey, the Q1 2025 business climate index, representing the insurers' perception of their business environment, dropped by 7.2 points to 18.0 points.
Jörg Asmussen, CEO of GDV, acknowledged the deterioration, stating, "Even as insurers, we are not exempt from the economic contraction in the real economy." He added that the sector remains resilient, holding onto cautious optimism for the future.
The Munich-based Ifo Institute regularly surveys around 150 insurers from various sectors about their business conditions and outlooks. Despite a high overall assessment of the life insurers' present situation, especially in new business, the outlook for the future (business expectations) saw a significant decrease, plummeting by 46.2 points to 0.4 points in Q1 2025.
Asmussen attributed the decline in expectations to weaker forecasted economic growth for Germany and persistent global uncertainty. In property and casualty insurance, an improvement in current claims numbers led to a more confident assessment, but the business outlook was not as optimistic.
Geopolitical uncertainties, economic challenges, natural catastrophes, increasing competition, and market conditions may have contributed to the cautious outlook from the insurance sector. Global market trends also played a role, with challenging conditions in specific risk categories affecting sentiment in specialized sectors.
In the face of geopolitical uncertainties and economic challenges, the German Insurance Association (GDV) has suggested a strengthening of the community policy, focusing on vocational training programs to prepare the workforce for various sectors, including the industry and finance, to ensure business resilience for the future. Notably, the insurers' business expectations for Q1 2025 dropped significantly, with life insurers anticipating a more conservative future due to weaker forecasted economic growth and persistent global uncertainty.
