Energy crisis steps in to replace Covid as curb against auto claims
Europe’s unfolding energy crisis is stepping up to replace Covid as a major curb against the frequency of insurance claims in the automotive sector.
The effect brings a minor hedge against the rise in individual claims costs driven by runaway inflation throughout Europe, currently visible in automotive spare parts but not yet in repair labour, officials at Generali have claimed.
“Frequency will not get back to the pre-covid level,” CEO Philippe Donnet (pictured) told his company’s Q2 earnings call, citing “a change in the behaviour of people following the change in fuel prices.”
Government’s have stepped up across the continent to encourage and subsidize public transport and insurers are taking note.
Citing a discount €9 catch-all public transport ticket in Germany, Generali CFO Cristiano Borean claimed a “material effect which is keeping frequency below the pre-covid level.”
Continued curbs on accident frequency won’t be enough to keep Generali from pursuing “aggressive” price hikes across its motor portfolio as the group watches inflation hit the severity side of the question. Generali is further tightening its underwriting and doubling down on claims management efficiency.
An initial round of price hikes brought a 4% average pricing gain and “there will be further rounds” of price increases pending. “Increases will be significant,” Donnet warned.
“We are taking actions to mitigate the impact of inflation on the cost of claims and on general expenses as well,” CEO Donnet said citing impact chiefly on parts prices “not yet on labour costs.”
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