German health insurance funds face 1.1 billion euro investment risk

German statutory health insurance funds have invested approximately 1.1 billion euros in problematic capital assets that are now classified as “performance-impaired.” According to a parliamentary inquiry by the Green Party, these investments include 900 million euros in real estate-backed debenture loans across twelve funds and 200 million euros in bearer bonds involving eleven funds.

Approximately 400 million euros have already been written off, but an additional 700 million euros remain on the books, with further losses possible. The losses are linked to risky investments made during periods of extremely low or negative interest rates, where funds sought higher yields through alternatives like real estate. Specific entities mentioned as affected include KKH, AOK Bremen, and the association of statutory health insurance physicians (KV) in Baden-Württemberg, the latter of which reportedly lost 96 percent of a 50 million euro investment.

The scale of the situation raises questions regarding the oversight of insured members' funds, given the high security requirements mandated by law for the management of statutory health insurance assets.