Why are German car insurance premiums rising in 2025?

Insurers are repricing to match higher claim costs. Parts with sensors and ADAS make repairs pricier, body shop wages are up, and reinsurance is costlier. Weather losses also add volatility. These inputs lift the break-even. To restore margins, carriers are pushing through higher rates on 2025 renewals.

What does GDV profitability imply for investors?

GDV signalling a return to profit means recent rate actions are working. If pricing discipline holds, combined ratios can trend lower in 2025. That supports better underwriting results and cash generation. We would track rate change, loss severity, and retention to confirm the durability of this profitability.

Will shoppers avoid higher premiums by switching providers?

Some will save by switching or adjusting cover, but broad market repricing limits the gap. Discounts appear tighter, and risk-based pricing is firmer. Shoppers may cut add-ons or raise deductibles to offset increases. The key investor watch item is retention. If it holds, margins should still improve.

What could derail the improving margin outlook?

A spike in bodily injury severity, fresh parts inflation, or severe storms could offset rate gains. A price war would also hurt. Offsets include better claims triage, reinsurance, and tight underwriting. Watch quarterly updates on combined ratios, rate actions, and customer churn for early warning signals.

Global Market Insights

February 17: German Auto Insurance Hikes Signal Firmer 2025 Margins

ByHuzaifa Zahoor February 17, 2026

German car insurance premiums are set to rise in 2025, according to fresh market checks. A new Verivox survey shows most drivers face higher quotes as parts and repair inflation feeds into policies. GDV also indicates motor insurers have returned to profit, helped by rate increases and cost controls. For investors, firmer pricing should support non-life margins in Germany this year. We cover drivers of pricing, the profit backdrop, and key watch items. Watch loss trends and customer retention, which now matter as much as price.