Life insurance - Germany

Germany

The Life insurance market market in Germany is expected to witness significant growth in the coming years.
According to projections, the market size, measured in terms of gross written premium, is anticipated to reach €100.80bn by 2024.
This indicates a positive trend in the demand for Life insurance market products within the country.
Furthermore, the average spending per capita in the Life insurance market market is estimated to amount to €1.21k in 2024.
This highlights the importance of Life insurance market as a financial instrument for individuals in Germany, as they seek to secure their future and protect their loved ones.
Looking ahead, the Life insurance market market is predicted to experience a steady annual growth rate of 0.41% from 2024 to 2029.
This positive trajectory is expected to result in a market volume of €102.90bn by 2029, further solidifying the significance of Life insurance market in Germany.
In a global context, it is worth noting that the United States is expected to generate the highest gross written premium in 2024, amounting to €1,195.0bn.
This showcases the dominance of the US market in terms of size and revenue generation in the Life insurance market industry.
Overall, the Life insurance market market in Germany is poised for growth, driven by increasing awareness about the importance of financial protection and the need for long-term planning.
Germany's life insurance market is experiencing a shift towards digital platforms, with more customers seeking online solutions for policy purchases and claims.

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Analyst Opinion

The Life insurance market in Germany has been experiencing a shift in customer preferences towards more comprehensive and long-term insurance coverage, reflecting a growing awareness of the need for financial security and stability.

Customer preferences: German consumers are increasingly seeking life insurance products that offer not only protection in case of unexpected events, but also investment opportunities for future financial growth. This shift towards more holistic life insurance policies can be attributed to a desire for long-term financial planning and wealth accumulation.

Trends in the market: One prominent trend in the German life insurance market is the rise of unit-linked insurance products, which combine life insurance coverage with investment options in capital markets. This trend reflects a growing interest among consumers in leveraging their life insurance policies to potentially generate higher returns through investments in stocks, bonds, and other financial instruments. Another notable trend is the increasing demand for retirement-focused life insurance products, such as pension plans and annuities. With an aging population and concerns about the sustainability of the public pension system, many Germans are turning to private life insurance solutions to ensure a comfortable retirement.

Local special circumstances: Germany's strong tradition of savings and financial prudence plays a significant role in shaping the life insurance market. The country's cultural emphasis on long-term financial security and risk aversion has fostered a favorable environment for life insurance companies offering stable and reliable insurance products. Moreover, the regulatory environment in Germany, characterized by strict consumer protection laws and transparency requirements, has influenced the development of innovative life insurance products that prioritize customer interests and financial well-being. This emphasis on consumer protection has helped build trust in the life insurance industry and encouraged more Germans to invest in life insurance policies.

Underlying macroeconomic factors: The low interest rate environment in Germany has had a profound impact on the life insurance market, prompting insurers to adjust their product offerings and investment strategies to navigate the challenges of generating returns in a low-yield environment. Insurers have been exploring alternative investment opportunities and risk management techniques to maintain profitability and meet their long-term obligations to policyholders. Furthermore, Germany's stable economic growth and low unemployment rate have contributed to a positive consumer sentiment and increased disposable income, driving demand for life insurance products as part of a comprehensive financial planning strategy. The country's robust regulatory framework and emphasis on financial stability have also bolstered confidence in the life insurance market, attracting both domestic and international insurers to operate in Germany's competitive insurance landscape.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.