GVNW chair Dr Alexander Mahnke says insurers risk undermining relationships with their commercial buyers
Speaking at the general assembly and delegates’ meeting of the German general association of insurance buying companies (GVNW), chairman of the board, Dr Alexander Mahnke, urged insurance companies to adopt a sense of proportion during the hardening commercial insurance market.
He said he understood the industry’s need to increase rates and withdraw capacity in order to ensure pricing is adequate from a profitability perspective. But he said that certain renewal behaviours were becoming a problem for buyers.
“In the association we hear stories like this almost every day: ’We have been waiting for two months to get a response from our property insurer about our renewal and now, in mid-October, we have been told verbally that just a third of the capacity is available and the premium has gone up by 85%’.”
“As GVNW, we have repeatedly called for a sense of proportion when adapting the business,” he continued. “For us such behaviour has nothing to do with a sense of proportion!”
D&O renewal negotiations were proving particularly problematic, said Mahnke. He noted that GVNW had conducted a survey among its members at the beginning of 2020 on their experiences of the previous renewal round. It found that bad or late communication was a major bugbear.
“We have shared this with the market in various places and also the big brokers have often pointed to comparable experiences,” said Mahnke. “Unfortunately it seems it is as if this has not been accepted by many insurers.”
“This is a particular shame and such behaviour is and remains unacceptable to us, as it damages the reputation of the entire industry.”
He issued an urgent warning to insurers to sufficiently and clearly communicate changes to policy premiums and terms and conditions and to keep the channels of communication open.
“Otherwise nobody will accept our assurances in the future that industrial insurance is about forming long-term relationships based on mutual respect and trust.”