German motor insurers face fragile recovery amid rising costs

German motor insurers are expected to achieve only a marginal technical surplus by 2026, according to projections from the German Insurance Association (GDV). The industry faces a fragile recovery as claim expenses are growing significantly faster than premium income.

The GDV anticipates a loss ratio of 99 percent for the full year, meaning 99 cents of every euro collected in premiums will be required to cover damages and costs. While premium income is projected to rise by nearly 7 percent to approximately 41 billion euros, claim payouts are expected to increase by more than 10 percent to about 35 billion euros.

A primary driver of this pressure is the rising cost of repairs. The average cost for a motor vehicle property damage claim has reached approximately 4,600 euros, representing a 70 percent increase since 2017. In 2025 alone, workshop hourly rates rose by an average of 7.5 percent, while spare parts prices increased by 5.6 percent.