1. Motor Vehicle Insurance – Looking ahead
Key Developments in Motor Insurance in the EU
Michael Theilmeier, Gen Re

2. Introduction: the right mind set
„A good copy is better than a bad invention“
„Kapieren nicht Kopieren“

3. Introduction: the right mind set
„A good copy is better than a bad invention“
„Kapieren nicht Kopieren“
But: Croatia is different!

4. “Typical” view of a reinsurer
35,000 feet
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Direct insurer
Ground forces
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Our approach
Helicopter view
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7. Introduction: the right mind set
„A good copy is better than a bad invention“
„Kapieren nicht Kopieren“
Croatia is different! But with some comparable features

8. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD

9. Some Data about the German Motor Market

10. German Motor insurance: premium income, 2014*
Distribution of gross premiums written, in EUR billions
Motor insurance overall:
MTPL
59.8%
Comprehensive
casco
33.3%
24.3
billion EUR
Partial
Casco
6.5%
6.6%
Passenger
accident
0.4%
* Preliminary result (status 26/02/2015)
04/06/2015

11. Development of German motor insurance contracts
MTPL and comprehensive casco, standardized contracts, in millions
* Preliminary result (status 26/02/2015)
04/06/2015

12. Development of German average annual motor premium
MTPL and comprehensive casco, in EUR
* Preliminary result (status 26/02/2015)
04/06/2015

13. Development of German gross motor premium income
MTPL and comprehensive casco, in EUR billions
* Preliminary result (status 26/02/2015)
04/06/2015

14. Development of German motor claims frequency
MTPL and comprehensive casco, permille
* Preliminary result (status 26/02/2015)
04/06/2015

15. Development of average amount of German motor claims
MTPL and comprehensive casco, in EUR
* Preliminary result (status 26/02/2015)
04/06/2015

16. Development of average amount of German motor claims
For bodily injury and material damage, MTPL, in EUR
* Preliminary result (status 26/02/2015)
04/06/2015

17. Underwriting results German motor insurance
MTPL and comprehensive casco, in EUR millions
* Preliminary result (status 26/02/2015)
04/06/2015

18. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD

19. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD
The greatest challenges are client orientation and digitalization

20. The changes of last 12 to 24 months are impressive
Insurers do not have to get „crunched“ between manufacturers/ importers/dealers and sales channels
Aggregators & transparency
Car manufacturers just defend
Multi-channeling as key to success

21. Pro-active Services Additional Services Repair shops
Sale of safe and cheap parts
Warning about traffic dangers
E-call services
New Products
Driver Policy
Total Damage Casco
Bonus Rebate Saver

22. The changes of last 12 to 24 months are impressive
Insurers do not have to get „crunched“ between manufacturers/ importers/dealers and sales channels
Aggregators & transparency
Car manufacturers just defend
Multi-channeling as key to success
Technical progress changes risk land- scape
Drones & 3D printers
Car sharing models
Telematics
Driver assist
Autonomous driving

23. Presentation for CAP, 1 April 2008
Autonomous driving
Tesla Autopolit tried to kill me!
Presentation for CAP, 1 April 2008

24. Reduction of 75% in Loss Costs in MTPL; 65% in MOD due to 6 major driver assist systems

25. Market Penetration for „classical“ driver assist systems
Good news: Croatia can learn from higher income countries before premiums drop.
„Bad“ news: further drop of neccessary premiums in the pipeline.

26. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD
The greatest challenges are client orientation and digitalization
Insurers do not have to get „crunched“ between manufacturers/importers/dealers and sales channels

27. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD
The greatest challenges are client orientation and digitalization
Insurers do not have to get „crunched“ between manufacturers/importers/dealers and sales channels
Technical progress will reduce loss costs per vehicle dramatically

28. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD
The greatest challenges are client orientation and digitalization
Insurers do not have to get „crunched“ between manufacturers/importers/dealers and sales channels
Technical progress will reduce loss costs per vehicle dramatically
Tariffication:

29. High/low frequency risks
Example: Motor liability (MTPL), passenger cars
Risk structure:
Type class (16 characteristic values)
Profession (3)
egional class (12)
Claim / No-claim class (bonus / malus) (39)
Mileage per year in km (8)
Ownership of residential property (2)
Differentiated age of users (16)
Group of users (2)
Age of the motor vehicle when acquired (12)
That means more than 138 million risk cells for passenger cars!
Number of risks: 41.8 million.
Number of claims: 2.7 million.
11/8/2018

30. Very large number of data needed for statistical stability
Vehicle years statistical confidence 95%

31. High/low frequency risks
Example: Motor liability (MTPL), passenger cars
Risk structure:
Type class (16 characteristic values)
Profession (3)
egional class (12)
Claim / No-claim class (bonus / malus) (39)
Mileage per year in km (8)
Ownership of residential property (2)
Differentiated age of users (16)
Group of users (2)
Age of the motor vehicle when acquired (12)
That means more than 138 million risk cells for passenger cars!
Number of risks: 41.8 million.
Number of claims: 2.7 million.
Support your Association in their endevour for market data & work with Consumer Protection agencies on fair prices
11/8/2018

32. Tariff structures and methodologies
Objective Criteria for Motor Vehicle itself:
Value, Kw, ccm → type of vehicle
Regional tariff
Age of the motor vehicle
Usage (km p.a.)
Isn´t the Driver more important???

34. Benefits of truck telematics
What are the Benefits?
GPS tracking in real time
Predictive diagnostics
Driver Profiling & Driver Behavior Functionality
Fuel Savings
Reduced Maintenance
Driver Compliance

35. „Banned“ Tariffication Criteria
Is Gender only first – and what is next, Age?

36. Correlation vs. Causation
There is a very strong correlation between the number of storks and the number of births in Germany.
But still, the following sentences are not true:
The number of births will increase at least by 10% because the number of storks increased by over 20%.
As the number of births drops, the population of storks will diminish
Presentation for CAP, 1 April 2008

37. Motor CoP meeting 18 September 2012

38. Age of youngest driver and difference to age group 42
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39. Age of owner/driver as Tariffication Parameter
Versicherungen & Finanzen

40. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD
The greatest challenges are client orientation and digitalization
Insurers do not have to get „crunched“ between manufacturers/importers/dealers and sales channels
Technical progress will reduce loss costs per vehicle dramatically
Tariffication: make it simple and based on objective criteria

41. Key discussion points
Motor business is cylical; the MTPL battle in Croatia can only be won with MOD
The greatest challenges are client orientation and digitalization
Insurers do not have to get „crunched“ between manufacturers/importers/dealers and sales channels
Technical progress will reduce loss costs per vehicle dramatically
Tariffication: make it simple and based on objective criteria
Pricing: think in margins, loss costs – not in premium volumes

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Our approach
Helicopter view
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43. Motor CoP meeting 18 September 2012
Thank you!
Motor CoP meeting 18 September 2012

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Proprietary Notice
The material contained in this presentation has been prepared solely for informational purposes by Gen Re. The material is based on sources believed to be reliable and/or from proprietary data developed by Gen Re, but we do not represent as to its accuracy or its completeness. The content of this presentation is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Die in dieser Präsentation enthaltenen Informationen wurden von der Gen Re lediglich zu Informationszwecken zusammengestellt. Das Material basiert auf zuverlässigen Quellen oder eigenen Daten der Gen Re. Dennoch übernehmen wir keine Haftung hinsichtlich ihrer Genauigkeit oder Vollständigkeit. Der Inhalt dieser Präsentation ist als allgemeine Information gedacht. Für Ihren konkreten Bedarf sollten Sie auf jeden Fall den Rat eines Spezialisten einholen.
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