German insurers raise concerns over eCall

23 May 2011

According to an article in Financial Times Germany, it seems that a part of the German Insurance industry is up in arms against the proposed eCall legislation by the EC.

It looks like the insurers are worried that vehicle manufacturers can make use of the eCall box in the car to be notified first of the accident and manage the claims process themselves (through partners) - directing users to their authorised garages or service stations. Big insurance groups like HUK-Coburg have established their own service station networks together with other insurers and therefore offer competitive prices to clients. This group wants an open solution whereby car owners will have the freedom to choose any service provider and all insurance companies can compete on a level playing field.

It appears that for several years, premiums in Germany's 20 billion euro ($26 billion) motor insurance market have been decreasing. In fact, listed insurers such as Allianz (who have signed a deal with VW), AXA SA, and Assicurazioni Generali S.p.A. are locked in a price war of attrition with mutually owned insurers such as HUK-Coburg AG.

The FT article says that the insurers' concerns have been raised with the European Commission, and the EC will be consulting with all the stakeholders.