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Scoop on Mandatory Insurance Brouhaha in the Land of Schengen
Remember the chaos that swept through parts of Austria last year? Yep, floods wreaking havoc, leaving destruction in their wake. The question on everyone's lips: why wasn't there mandatory insurance against natural disasters?
Well, guess what? It appears the political powwow on this matter is as dry as the Sahara. As Ralph Müller, the big cheese at Wiener Städtische, so eloquently put it, there's nary a peep from the political playing field at the moment.
Wiener Städtische: The Unlucky Winner of Mother Nature's Wrath
Our beloved Wiener Städtische got hit hard by the storms, racking up an astonishing €227 million in damages – a record-breaking one, if we might add. Storm damage accounted for nearly 90% of the damages, with €207 million alone going towards flood, storm, and hail damages, and a staggering €129 million for last September's floods alone. Profits? They took a hit, dropping from €349.2 million the year prior to a measly €318.6 million.
Ralph Müller isn't one to mince words. He sees the increasing storm damages as a clear sign of climate change, and fears it's only the beginning. More intense rainfall, harsher hailstorms, and frequent floods? We're in for quite the rollercoaster, folks.
Müller recommends voluntary excess insurance to cover damages up to €50,000. But there's a catch: it's only available outside of flood zones.
Health and Life Insurance on the Rise
Despite the disaster, Wiener Städtische saw a 6% increase in premium volume, hitting €3.6 billion. The strongest segment was property and accident insurance with a premium volume of €1.85 billion and growth of 7.6%. Premium payments for health insurance increased nearly 10%, with a volume of €542 million last year. Seems like health insurance is the new flavour of the month!
Young folks are also jumping on the health insurance bandwagon: one-third of new business at Wiener Städtische are under 20! Everyone's getting in on the action, it seems.
Insurance Gains in Life Insurance – Going Against the Grain
Contrary to the industry trend, Wiener Städtische saw a gain of 1.8% in life insurance, hitting €1.2 billion. Müller attributes this to early focus in this area and speaks of a change in the broader perception of the pension system due to aging and declining birth rates. He expects further growth in the sector in the coming years.
A Pension System in Trouble?
60% of new business at Wiener Städtische is unit-linked life insurance. Müller advocates for capital coverage components in the state pension system. He's alarmed that higher pensions haven't been adjusted more moderately during periods of high inflation, which he believes undermines solidarity towards younger generations and leaves them with lower pensions and the brunt of climate change implications.
Müller continues to push for a reduction in taxes on life insurance from the current 4 to 2%, calling it a "strong signal". He also supports the adjustment of the long-unchanged tax-free amount for occupational pensions, as planned in the government program, as a first step towards strengthening the second and third pillars – occupational and private old-age provision. However, the measure is subject to budget reserve.
Teenagers might not need to work as hard for their pensions
Seems like the youth will have it a bit easier when it comes to pensions. But watch out for those climate change costs creeping up, kids!
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[References for Enrichment Data][1] "Italy extends disaster insurance for SMEs against catastrophic risks" - Reuters, 2020.[2] "Gallagher's Global Catastrophe Recap 2019: Two Catastrophes Drive Record Insured Losses" – Gallagher, 2020.
- Despite the recent floods causing significant damages to Wiener Städtische, there is minimal action being taken in the political arena regarding mandatory insurance against natural disasters.
- Ralph Müller, the head of Wiener Städtische, attributes the increasing storm damages to climate change, fearing more intense rainfall, harsher hailstorms, and frequent floods in the future.
- To cover damages up to €50,000, Müller recommends voluntary excess insurance, but it's only available outside of flood zones.
- Wiener Städtische saw a 6% increase in premium volume, with health insurance seeing nearly a 10% increase and becoming a popular choice, especially among young people.
- Contrary to the industry trend, Wiener Städtische saw a gain of 1.8% in life insurance, with Müller attributing this to early focus in this area and hoping for further growth in the coming years.
- Müller advocates for capital coverage components in the state pension system, believing higher pensions haven't been adjusted moderately during periods of high inflation, which undermines solidarity towards younger generations and leaves them with lower pensions and the brunt of climate change implications.
