Reflections on the German insurance market


I’m just on a train on a Petit Tour of Oxbow Partners’ German clients and contacts. In these times of intense soul-searching about Britain’s relationship with our European neighbours, I thought I would add my observations about the insurance market of our continental friends.

1. It turns out that insurance in Germany does, perhaps, follow British trends
About ten years ago, you had to be careful when talking to German clients as a British advisor. Every reference to aggregator and digital distribution trends in the UK had to be caveated: “of course, agency networks make Germany different”. Now, however, German insurers are all about “digital” and a recent report by Finaccord shows how aggregators are growing share across Europe. So maybe Germany is at a sort of tipping point where consumer demand for online generally will force insurers to build digital distribution, despite the conflicts this will cause for their agents. Big insurers like Allianz have made major announcements about digital, and it feels unlikely that there will be any turning back. This could be bad news for the large number of smaller German insurers, and the agency channel more generally.

2. is different to
Everyone is grappling with digital, but the German and British approaches appear different. Whilst is focused on innovation and new distribution models, it seems like German insurers are more focused on core systems. Perhaps this is in line with the national stereotype – Germans being a bit steadier but doing things “properly” – or perhaps it is a reflection of where the markets are. Britain is already largely direct and digital, Germany needs to get itself there before starting on disruptive innovation.

3. The German insurance industry is fighting some interesting talent challenges
One of the particularities of the German educational system is the vocational track, which in the case of insurance leads to a qualification called the “Versicherungskaufmann” or “-kauffrau”. Until about 10 years ago these were fantastic qualifications, churning out productive junior staff into the workforce. All the big companies supported, and continue to support, the apprentice-like programme. During a wide-ranging discussion, one senior client suggested that these qualifications were now less important as skills required in the industry had moved on so much, and particularly away from “technical” insurance skills. He suggested that companies were offering this qualification almost out of “social politeness” than any business rationale these days. German and British companies alike need to work out how to attract a much greater range of skills in the future, and education needs to move with the times. Take note, the CII!

4. It’s still strangely difficult to pay with a credit card in Germany
For all its engineering and economic prowess, it remains almost impossible to survive in Germany relying solely on a credit card – let alone with just an iPhone. A waiter brought me an apple juice and took it away again when I (luckily) asked to pay on delivery and was amazed to discover that he didn’t even have a card terminal in his café. In Britain we sometimes forget that many cultures are still cash cultures. What does that mean for “digitalisation” in Germany I wonder?

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About the author

Chris Sandilands, ACII is a Partner at Oxbow Partners. Chris advises (re)insurers and brokers on a range of strategy topics and M&A. Chris started his career as a D&O underwriter at Munich Re, before joining Oliver Wyman, the consulting firm. You can reach him at

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