Insurers fundamentally restructuring their main frameworks - a detailed examination
The German insurance market, a significant player in property, liability, accident, and motor vehicle insurances, is undergoing a significant transformation. This metamorphosis is driven by a range of key factors, including digitalization, market consolidation, and economic conditions.
In the motor vehicle insurance sector, after years of losses, German insurers have finally returned to profitability in 2025. Premium increases have been instrumental in achieving this turnaround, with the combined ratio reaching 97%, indicating underwriting profitability for the first time in several years. The escalating costs for spare parts and repairs, driven by higher car manufacturer prices, had previously pushed claims expenses above premiums collected.
Digital innovations, particularly in health insurance, are spearheading broader shifts in the market. The rollout of electronic patient records (ePA) to statutory health insured individuals is accelerating data integration and digital service offerings. Legislation such as the Health Data Use Act (GDNG) enables the use of anonymized health data for research and AI development, enhancing innovation potential. These digital healthcare developments create more efficient processes and may influence insurance risk assessments and customer engagement in property, liability, and accident insurances as well.
Market consolidation is another notable trend, with major mergers in the health insurance sector demonstrating this trend. This consolidation allows insurers to better manage IT infrastructure costs and negotiate health provider tariffs, illustrating competitive restructuring, also applicable to property and liability segments as digital capabilities and cost pressures mount.
Economic growth in Germany is modest, and policy uncertainty continues, potentially affecting insurance demand. However, supportive credit conditions and a more expansionary fiscal stance from the government could boost economic activity and insurance market growth in the near future.
The dynamics collectively are reshaping the German insurance market’s product offerings, pricing, operational models, and competitive landscape. BearingPoint, an independent management and technology consultancy firm with European roots and global reach, predicts market consolidation within five years. AI-relevance is not exclusive to core systems, with areas such as claims processing, product configuration, new product rollout, identification of churn risks, and general case management being highlighted.
Ninety-one percent of those surveyed see topics such as automation and process efficiency as central future challenges. Sixty-three percent of survey participants see AI-based solutions as a key technological trend for core systems. Sixty-eight percent of the actors surveyed expect a decreasing number of system providers and solutions. Over 80% of insurers plan initiatives for transformation or have already begun the process.
The study, "SHUK Core Insurance Systems 2025 - Market, Perspectives, and Strategic Options," focuses on the private customer business. BearingPoint's clients include many of the world's leading companies and organizations, with a global network of over 10,000 employees supporting clients in more than 70 countries. The full study, "SHUK Core Insurance Systems 2025," can be requested at [email protected].
In the future, core systems will increasingly function as "Systems of Record," serving as a stable foundation for core processes. A faster time-to-market for new products and the availability of specialist staff in combination with currently outdated technologies are further significant drivers of change. Approximately 80% of total SHUK gross premiums in Germany are managed in the nearly 280 implementations analyzed. The success factor for the implementation of new core systems is the preparation of the organization.
The attached infographic is free to use for editorial purposes, with credit to BearingPoint. The study is the most comprehensive and multifaceted study on SHUK core systems in the German insurance market.
In the realm of health insurance, digital innovations are spearheading transformations, with the rollout of electronic patient records and the Health Data Use Act enabling anonymized health data use for research and AI development. These advancements may influence risk assessments and customer engagement in property, liability, and accident insurances as well.
In the context of business consolidation, significant mergers in the health insurance sector, such as those observed, demonstrate a competitive restructuring trend that is likely to expand across property and liability insurance segments as digital capabilities and cost pressures increase.
