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In future, Ergo will be the exclusive insurance partner of Bavaria for leasing contracts and financing offers for small cars and other BMW models.
Frankfurt The Munich Re subsidiary Ergo becomes the car company’s new insurance partner BMW and surprisingly stings the rival Generali out. The Düsseldorf primary insurer and BMW Bank have agreed on a strategic cooperation for the leasing and financing business in the German dealership business, as the Handelsblatt learned in advance.
The collaboration is officially presented on Tuesday. Since July this year, the insurer from the North Rhine-Westphalian capital with its mobility subsidiary Ergo Mobility Solutions has been a strategic partner of BMW Bank. The competitor originally had Generali agreed with the car maker last year, going to be exclusive in the future to take care of the protection of leased and financed cars and motorbikes at BMW. But about a year later, Ergo gets the lucrative deal.
The weights in the competitive automotive insurance market in Germany rearrange itself. Until a few years ago it was the largest German insurer alliance the partner of the Munich automotive group. But in 2019, the two Munich Dax companies parted ways.
Last August it was announced that the car maker BMW the competitors Axa and selected Generali as a new partner for insurance solutions. With the German subsidiary of the French insurer Axa Should new insurance solutions be developed, Generali should from now on take care of securing leased and financed cars and motorbikes.
Back then Generali Germany boss Giovanni Liverani spoke of an important step for the growth strategy 2021. But in industry circles it is now said that Ergo ultimately offered better conditions than the German subsidiary of the insurer from Trieste.
Flat rate model planned for finance and leasing business
BMW did not want to comment on the information. For Ergo, the partnership with the car maker is a prestigious step. Ergo Mobility boss Karsten Crede internally called the partnership a “coup”.
The collaboration should not only include offers for leasing customers, but also a development partnership. Together, the two companies want to offer a flat rate model in the finance and leasing business, for example, according to the industry. In the future, the constant monthly leasing rate will be supplemented by a constant insurance rate.
Ergo was an insurance partner of BMW before 2014, before the alliance prevailed at the carmaker from 2015. The Allianz order at the time also attracted Crede, who campaigned for orders from automotive companies worldwide for Allianz before moving to Ergo in 2017
In general, the car insurance market is on the move. For example, Allianz only entered into a far-reaching partnership with the ADAC last year, who had previously been in the automotive sector for many years Zurich– Insurance had worked together.
Many insurers see car insurance as a gateway to the world of customers and are therefore vying for the opportunity to conclude the generally lucrative large contracts with the car manufacturers. The providers change accordingly with the manufacturers. After all, the motor insurance market is one of the most important pillars in the industry after life insurance. However, the corona crisis has also shaken up this market.
Many car insurers hardly make any money from their services
“At the height of the pandemic, when the car dealerships were closed, our new business decreased by 60 percent,” said Allianz board member Jörg Hipp recently about slumps in the automotive business. The management consultants of EY Innovalue expect significant market losses in the insurance industry due to the corona pandemic.
In the composite private customer business, the experts anticipate a decline in inventories of two to three percent, particularly in the motor vehicle and accident sectors, but they do not see the general growth trend broken. The reasons for the decline are increased price comparisons, lower vehicle registration numbers as well as a decline in demand and cancellations in “dispensable” sectors.
According to data from the entire insurance industry association, the roughly 90 car insurers active in Germany had rendered services worth around 24 billion euros a year for their customers – but many do not earn much more from this.
Because the German car insurance market has been characterized by intense competitive pressure for many years. Industry expert Andreas Kelb from der Hannover Re expects that car insurers will come under even greater pressure in the future due to the rising costs of processing claims.
This makes cooperation between product providers and insurance companies all the more important for the industry. New payment models such as complete offers are now becoming more and more fashionable, with vehicle protection already included in the purchase. Because more and more policies are now being concluded online. This is putting pressure on insurers’ margins – and has been for years. It is all the more important for insurers to try to stand out and, if possible, get customers to sign at the dealership.
Complete offers are trendy
So brought a few days ago Volvo and the alliance with Volvo Schwedenkasko out a new package product. All new Volvo and daily registrations that are electrically rechargeable and meet certain equipment criteria will in future receive free comprehensive coverage up to 5,000 euros inclusive, which can be increased for a fee.
Customers of BMW and Mini will in future also receive free comprehensive insurance coverage for a period of one month when purchasing a new or used car, which the Cologne-based company hope that many customers will be able to extend it for a fee after the trial period has expired. After a year of testing, BMW and Axa recently rolled out the tariff under the title “Ready2Drive”.
Motor insurance taken out through the car manufacturer is, on average, around 20 percent more expensive than the cheapest tariffs on comparison portals, according to a study by Finanztip. Customers should therefore compare the prices before they take out insurance for the car.