FRANKFURT, March 17 (Reuters) - Insurer HUK Coburg, vying with Allianz (ALVG.DE) for leadership of Germany’s 20 billion euro ($27.6 billion) motor insurance market, is raising prices but says it’s too early to say the industry’s price war is over.
“We are raising our tariffs by a single-digit percentage on average,” a spokesman for HUK, the German mutual insurer, said on Wednesday.
“We don’t necessarily see this as the end of the price battle,” the spokesman added.
HUK’s price changes go into effect on April 1 and the single-digit percentage rise is relative to the prices prevailing at the start of 2010.
The rise was in response to higher damage claims and it cannot be excluded that prices might decline again later in the year, as they had done in past years, the spokesman said.
The comments dampen repeatedly expressed hopes for a turnaround in the segment, which has been a drag on property and casualty insurance performance in Europe’s biggest economy.
Total motor insurance premiums have drifted downwards for years in Germany as the price war pitted listed insurers such as Allianz, AMB Generali (GASI.MI) and AXA (AXAF.PA) against not-for-profit mutuals like HUK Coburg.
Allianz reported last week that its underwriting loss in the segment widened in 2009 from 2008, while premium income fell 3.4 percent to 3.3 billion euros. [ID:nLDE62A25S]
Prices were at the level of 20 years ago, Allianz said.
HUK has been gaining on Allianz in terms of the total number of vehicles it insures, with each company now insuring around 8.5 million vehicles.
A survey in Germany’s Handelsblatt newspaper released ahead of publication on Thursday pointed to tariff price rises in double-digit percentages for some types of policies.