The top 10 German health insurance companies are:
Mecklenburgische Kranken ranks first in the ranking for the second consecutive year. In previous years, it ranked fourth and second, respectively, demonstrating steady improvement. With an economic equity ratio (economic equity relative to total assets) of 30.57%, it is significantly ahead of the runner-up, R+V Kranken (economic equity ratio of 15.05%). ENVIVAS Kranken once again secured third place on the winners’ podium (economic equity ratio of 14.74%) .
Mecklenburgische Kranken has the strongest risk and other results in the market relative to its size. The products thus demonstrate exceptionally high underwriting profitability. Combined with the high stability of the portfolio (low portfolio attrition), this leads to high expected surpluses. Policyholders also benefit from this through profit participation. The core business is extremely healthy and correspondingly high profits are expected in the future. This strengthens Mecklenburgische Kranken’s financial strength. The only drawback is the above-average investment expenses. This could be due to depreciation.
2024 DE Health Mecklenburgische Kranken – graph 1 – top 1:
This year, the observation that size alone does not equate to financial strength was confirmed once again. Numerous industry giants are below the market average: Generali (18th place), AXA (29th place), ERGO (30th place), Allianz (second to last place, 31st place), and DKV (last place, 32nd place).
Market leader Debeka ranks 28th out of 32 health insurers. Its economic equity ratio is 7.78 percent. Although Debeka boasts above-average and continually rising returns on investments, its expected future surpluses have come under pressure over the past two years. This is also due to its relatively low long-term stability: While the market average is only 5.3% of policyholders leaving the collective due to expiration or cancellation annually, Debeka’s figure is 7.9% per year. Furthermore, Debeka’s commercial equity ratio is below the market average. This is typical for industry giants that enjoy the trust of policyholders even without a high equity base. However, the RealRate valuation model does not provide a bonus for company size alone. We consider the relative balance sheet structure, thus making large and small insurers comparable. The health insurance rating, in particular, clearly shows that smaller providers in particular have a favorable balance sheet structure.
2024 DE Health Debeka Kranken – graph 2 – big player:
A total of 32 German health insurers were analyzed and evaluated for their financial strength. Two metrics are central to strong financial strength: first, equity capital according to the German Commercial Code (HGB), and second, underwriting profitability in the form of risk and other results. In addition, the company’s continued existence and investment results also play an important role.
The RealRate valuation model does not use fixed weights, but rather determines the fair economic value of a company using a holistic valuation approach. As shown in the graphic, the numerous pieces of information from the balance sheet and income statement are gradually combined to produce a single company value, the economic equity. The causal chart uses color and numerical coding to illustrate the factors contributing to the health insurer’s above-average performance.
The complete ranking is available at:
https://news.realrate.ai/ranking-area/2024-de-health-insurance/
The methodology used is described in “Explainable Artificial Intelligence Using the Example of Ratings of German Life Insurance Companies”.
The insurance journal also recently reported on this ranking:
“These private health insurers are particularly financially strong.”
https://www.versicherungsjournal.de/versicherungen-und-finanzen/diese-privaten-krankenversicherer-sind-besonders-finanzstark-151915.php
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