Carmild News-2011 German motor insurance price war ebbs-HUK Coburg

Carmild News-2011 German motor insurance price war ebbs-HUK Coburg, May 10 (Reuters) – The long war of attrition among car insurers in Germany is ending, though prices are below what the 20 billion euro ($28.57 billion) market needs to be profitable, German insurer HUK Coburg said on Tuesday.

“The price-cutting cycle appears to have stopped for the time being,” Chief Executive Wolfgang Weiler said at the insurer’s annual results news conference.

HUK, which wrested the title of market leader in car insurance from Germany’s biggest insurer, Allianz (ALVG.DE), still aims to offer the most competitive policies, even while raising prices at the same time, he said.

Premiums in Germany’s car insurance market, which pits listed insurers such as Allianz, Generali (GASI.MI) and AXA (AXAF.PA) against not-for-profit mutual insurers like HUK, have been drifting downward for years, dipping to levels not seen since the 1980s.

Many car insurers continued to lose money last year.

HUK estimated that for the car insurance segment as a whole, costs and claims totalled 107 percent of premiums earned.

HUK swung to an underwriting loss last year for the first time since the late 1990s, with a so-called combined ratio rising to 102.3 percent.

Weiler blamed the swing on higher damage claims linked to cold winter weather and said profitability would improve in 2011, without giving details.

The early months of this year had already seen a drop in damage claims, he said.

HUK increased the number of vehicles it insures by 90,000 at the end of last year, bringing its total to 8.77 million.

HUK’s car insurance premiums rose by 3.3 percent, outpacing the overall market gain of 0.6 percent.

Weiler said he expected both HUK’s car insurance segment and its overall business to see premiums rise this year.

Allianz insured around 8.16 million vehicles at the end of last year, or about 300,000 less than a year earlier.

(Reporting by Christian Kraemer, additional reporting by Jonathan Gould in Frankfurt; Editing by David Cowell)