German insurance sector stabilizes as rates outpace inflation. AM Best upgraded its outlook for Germany's non-life insurance segment to stable from negative, citing expectations that premium rate increases will continue offsetting claims inflation and restoring profitability. The ratings agency projects modest but positive economic growth support through 2026, with rate adjustments expected to continue at a more moderate pace than recent years. While competitive pressure is rising in motor insurance, the market is expected to remain rational. Reinsurance pricing volatility remains manageable, though property insurers face ongoing exposure to extreme weather events. The softer reinsurance market at January 2026 renewals has brought significant price reductions and improved coverage terms, particularly benefiting loss-free accounts and supporting technical results across the segment.
