{"id":7006,"date":"2023-01-30T13:23:50","date_gmt":"2023-01-30T12:23:50","guid":{"rendered":"https:\/\/www.sv-merker.de\/industrielle-sachversicherung\/"},"modified":"2023-03-09T10:58:37","modified_gmt":"2023-03-09T09:58:37","slug":"industrial-property-insurance","status":"publish","type":"post","link":"https:\/\/www.sv-merker.de\/en\/industrial-property-insurance\/","title":{"rendered":"Factors influencing industrial property insurance"},"content":{"rendered":"<div id='full_slider_1'  class='avia-fullwidth-slider main_color avia-shadow  av-small-hide av-mini-hide  avia-builder-el-0  el_before_av_section  avia-builder-el-first   container_wrap fullsize' style=' '  ><div   data-size='featured_large'  data-lightbox_size='large'  data-animation='fade'  data-conditional_play=''  data-ids='6860'  data-video_counter='0'  data-autoplay='true'  data-bg_slider='false'  data-slide_height=''  data-handle='av_slideshow_full'  data-interval='5'  data-class=' image_no_stretch'  data-el_id=''  data-css_id=''  data-scroll_down=''  data-control_layout='av-control-default'  data-custom_markup=''  data-perma_caption='aviaTBperma_caption'  data-autoplay_stopper=''  data-image_attachment=''  data-min_height='0px'  data-src=''  data-position='top left'  data-repeat='no-repeat'  data-attach='scroll'  data-stretch='image_no_stretch'  data-default-height='42'  class='avia-slideshow avia-slideshow-1  av-control-default av-default-height-applied avia-slideshow-featured_large av_slideshow_full  image_no_stretch avia-fade-slider '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\" ><ul class='avia-slideshow-inner ' style='padding-bottom: 42%;' ><li  class=' av-single-slide slide-1 ' ><div data-rel='slideshow-1' class='avia-slide-wrap '   ><img src='https:\/\/www.sv-merker.de\/wp-content\/uploads\/Header-Einflussfaktoren-Industrieversicherung-1500x630.png' width='1500' height='630' title='Industrial insurance 2023' alt='How macroeconomic factors influence industrial insurance'  itemprop=\"thumbnailUrl\"   \/><\/div><\/li><\/ul><div class = \"caption_fullwidth av-slideshow-caption caption_left\"><div class = \"container caption_container\"><div class = \"slideshow_caption\"><div class = \"slideshow_inner_caption\"><div class = \"slideshow_align_caption\"><div class='avia-caption-content  '  itemprop=\"description\"  ><p>Insurance policies are taken out to reduce uncertainty. But what happens when the insurance policy itself becomes the subject of the greatest uncertainty? We are currently observing this development in industrial insurance.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>\n<div id='av_section_1'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-1  el_after_av_slideshow_full  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div  style='height:40px' class='hr hr-invisible   avia-builder-el-2  el_before_av_four_fifth  avia-builder-el-first '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-3  el_after_av_hr  avia-builder-el-last  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><p><div  style='padding-bottom:0px; ' class='av-special-heading av-special-heading-h1  blockquote modern-quote  avia-builder-el-4  el_before_av_textblock  avia-builder-el-first   av-mini-hide'><h1 class='av-special-heading-tag  av-mini-font-size-overwrite av-mini-font-size-24'  itemprop=\"headline\"  >How macroeconomic factors influence industrial property insurance<\/h1><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><p><em>30th January 2023 by P. Merker<\/em><\/p>\n<p>Insurance policies are taken out to reduce uncertainty. But what happens when the insurance policy itself becomes the subject of the greatest uncertainty? We are currently observing this development in industrial property insurance.<\/p>\n<p>From which <span style=\"color: #90111c;\">macroeconomic factors does the uncertainty result?<\/span> What are the consequences for property insurance in industry and commerce? What options do you have as an entrepreneur and how should they be evaluated?<\/p>\n<p>This is what we want to talk about in the following.<\/p>\n<\/div><\/section><\/p><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='av_section_2'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-6  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-7  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2><span style=\"color: #90111c;\"><strong>Table of contents<\/strong><\/span><\/h2>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#1\">Part 1: Macroeconomic trends and influences<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#1\">Inflation \u2013 Come to stay?<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#1\"><em>Causes of inflation<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#2\"><em>Producer prices vs. consumer prices<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#3\"><em>Influence of interest rates and investments<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#4\"><em>And in the long term?<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#5\">Supply chain problems<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#6\">Natural disaters and major fires<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#6\"><span style=\"color: #5f6062;\">Natural <\/span><span style=\"color: #5f6062;\">catastrophes<\/span><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#7\">Major fires<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#8\">Excursus: Accumulation risks<\/a><\/span><\/p>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#9\">Part 2: What are the implications for industrial property insurance?<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#9\">Rise in the cost of claims<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#10\">Rising retroactive losses<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#11\">Declining insurance capacities<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#12\">Rising premiums<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#20\">Underinsurance in industrial property insurance<\/a><\/span><\/p>\n<p><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#13\">Part 3: What courses of action do you have?<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#13\">Higher deductible<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#14\">Cancellation and tariff change<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#15\">The risky way: Not adjusting the sum insured<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#16\">The better way: Adjust sums insured<\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#16\"><em>The right sum insured in industrial property insurance<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#17\"><em>Adjustment of the sum insured through value adjustment clauses<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#18\"><em>Recalculation of the sums insured<\/em><\/a><\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #5f6062;\"><a style=\"color: #5f6062;\" href=\"#19\">Adjusting liability periods in loss of earnings insurance<\/a><\/span><\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='1'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-9  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-10  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2>Part 1: Macroeconomic trends and influences<\/h2>\n<h3>Inflation &#8211; Come to Stay?<\/h3>\n<h4>Causes of inflation<\/h4>\n<p>The misery was unleashed at the latest with the outbreak of the global <span style=\"color: #90111c;\">pandemic<\/span> in 2020: After the initial pandemic-induced collapse in demand and supply, demand was boosted by all kinds of <span style=\"color: #90111c;\">government aid programmes<\/span>.<\/p>\n<p>Global <span style=\"color: #90111c;\">production declines<\/span> on the one hand and a <span style=\"color: #90111c;\">change in consumption<\/span> towards durable consumer goods on the other (did you also buy a new sofa?) led to <span style=\"color: #90111c;\">supply bottlenecks.<\/span> Pre-products and raw materials became scarcer and scarcer.<\/p>\n<p>The <span style=\"color: #90111c;\">Russian war of aggression<\/span> acted as an accelerant. Sanctions and supply chain disruptions made energy and raw materials even more expensive. Prices were driven up further.<\/p>\n<blockquote>\n<p>High inflation rates are an uncertainty factor per se, but the greatest uncertainty at the moment is the question of how the price increases will continue.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='2'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-12  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-13  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h4>Producer prices vs. consumer prices<\/h4>\n<p><span style=\"color: #90111c;\">Producer prices<\/span> give <span style=\"color: #90111c;\">reason to hope<\/span> that the peak has been exceeded.<\/p>\n<p>This is because <span style=\"color: #90111c;\">producer prices usually run ahead of consumer prices<\/span>. Producer prices show how expensive it is to produce goods. This in turn indicates which <span style=\"color: #90111c;\">price increases consumers<\/span> can expect in the future.<\/p>\n<p>It is true that producer prices are still at a historically high level. In December, the increase was 21.6%. But &#8211; and this is the good news &#8211; in September the increase was almost twice as high!<\/p>\n<div id=\"attachment_7013\" style=\"width: 1040px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7013\" class=\"size-large wp-image-7013\" src=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-1030x354.png\" alt=\"Shift in the consumer price index compared to the producer price index - with and without energy\" width=\"1030\" height=\"354\" srcset=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-1030x354.png 1030w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-300x103.png 300w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-768x264.png 768w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-1536x527.png 1536w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-2048x703.png 2048w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-1500x515.png 1500w, https:\/\/www.sv-merker.de\/wp-content\/uploads\/CPI-vs.-PPI-705x242.png 705w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\" \/><p id=\"caption-attachment-7013\" class=\"wp-caption-text\">Shift in the consumer price index compared to the producer price index &#8211; with and without energy<\/p><\/div>\n<p>So you can see that production costs are falling. The reason for this hopeful development is essentially the energy prices, which are returning to normal somewhat. On the other hand, the supply chains also seem to be stabilising.<\/p>\n<p>So can we give the all-clear?<\/p>\n<p>Probably not yet, because it cannot be ruled out that energy prices will go up again. And a second <span style=\"color: #90111c;\">&#8220;danger&#8221;<\/span> looms from the wage front in the form of <span style=\"color: #90111c;\">inflation-correcting wage increases<\/span>. Another wave of price increases is possible.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='3'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-15  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-16  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section  av-mini-hide\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h4>Influence of interest rates and investments<\/h4>\n<p>And then there are the <span style=\"color: #90111c;\">interest rates<\/span>, which could make <span style=\"color: #90111c;\">financing costs<\/span> more expensive and lead to a <span style=\"color: #90111c;\">decline in investment<\/span>. This would of course have a <span style=\"color: #90111c;\">price-dampening effect<\/span>, but possibly at the price of a <span style=\"color: #90111c;\">recession<\/span>.<\/p>\n<p>The same applies if companies cut back their production because of higher energy prices and sell <span style=\"color: #90111c;\">energy quotas on the spot market<\/span> instead. This could put downward pressure on inflation, but also raise recession concerns.<\/p>\n<p>On the other hand, if the <span style=\"color: #90111c;\">shutdown or curtailment of energy-intensive manufacturing operations<\/span>, such as steel mills, leads to renewed shortages &#8211; of construction raw materials, for example &#8211; a new wave of price rises could be the unpleasant consequence.<\/p>\n<p>The <span style=\"color: #90111c;\">resurgent China<\/span> could also massively demand scarce raw materials and drive up prices.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='4'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-18  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-19  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section  av-mini-hide\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h4>And in the long term?<\/h4>\n<p>And what will happen in the long term? Will we get the &#8220;good old days&#8221; with around 2% again?<\/p>\n<p><span style=\"color: #90111c;\">Demographics<\/span> (more pensioners, fewer productive people), <span style=\"color: #90111c;\">green transformation and decarbonisation, rising military spending and deglobalisation tendencies<\/span> are <span style=\"color: #90111c;\">structural changes<\/span> that have to be paid for. In our opinion, we are likely to see significantly higher inflation rates in the longer term as well.<\/p>\n<blockquote>\n<p>Conclusion: Not only inflation, but above all the future development of inflation remains an uncertainty factor.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='5'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-21  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-22  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section  av-mini-hide\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Supply chain problems<\/h3>\n<p>Inflation-related uncertainties are closely linked to the problem of <span style=\"color: #90111c;\">disrupted supply chains<\/span>. The pandemic-related supply disruptions in 2020 drove inflation to no small extent.<\/p>\n<p>Then in 2022 it was <span style=\"color: #90111c;\">China&#8217;s strict Corona policy<\/span> that had a drastic impact on supply chains. The port in Shanghai was closed for weeks. More than a thousand ships were jammed off Europe&#8217;s North Sea coast.<\/p>\n<p>In addition to the already existing disruptions as a result of Corona and the China lockdown, geopolitical conflicts now directly affected global trade with the <span style=\"color: #90111c;\">Ukraine war<\/span>.<\/p>\n<blockquote>\n<p>Trade through change? The basis of our world order seemed secure.<\/p>\n<\/blockquote>\n<p>The scale of supply chain bottlenecks has reached a new dimension with the war. We see how <span style=\"color: #90111c;\">dependent we are on globalisation<\/span>, especially for <span style=\"color: #90111c;\">energy supplies.<\/span> The current energy price crisis is even threatening the existence of some energy-intensive companies.<\/p>\n<p>But other causes also contribute to supply chains not working: <span style=\"color: #90111c;\">Container shortages, lack of truck drivers, high staff absenteeism due to illness<\/span>.<\/p>\n<blockquote>\n<p>Conclusion: Global supply chains remain fragile due to the war. Even if companies have already made adjustments, uncertainty remains.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='6'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-24  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-25  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Natural disasters and major fires<\/h3>\n<h4>Natural catastrophes<\/h4>\n<p>The devastating <span style=\"color: #90111c;\">flood disaster in the Ahr valley<\/span> dominated the insurance market in 2021. For German insurers, 2021 was <span style=\"color: #90111c;\">the most expensive year<\/span> in their history, with claims expenditure of \u20ac8 billion.<\/p>\n<p>Worldwide, 2021 was the fourth most expensive <span style=\"color: #90111c;\">natural catastrophe year<\/span> with a claims expenditure of 120 billion USD. Hurricane &#8220;Ida&#8221; and winter storm &#8220;Uri&#8221; caused considerable damage, with Uri particularly affecting the chemical industry.<\/p>\n<blockquote>\n<p>There are enough forecasts that see this not as an exception but as a trend.<\/p>\n<\/blockquote>\n<p>If we follow them, we will see <span style=\"color: #90111c;\">many extreme weather events<\/span> in the future. Heavy rain and floods in Europe, severe thunderstorms in the USA, persistent droughts, record low water levels on important waterways.<\/p>\n<p>Indeed: the so-called secondary hazards (<span style=\"color: #90111c;\">hail, forest fire, thunderstorms<\/span>) are by no means secondary. According to Swiss Re, they caused almost 50% of natural catastrophe losses worldwide in 2022!<\/p>\n<p>There were also many global natural catastrophes in 2022, such as floods in Australia, China and South Africa, earthquakes in Japan and Afghanistan, local tornado events in the USA, winter storms in Germany.<\/p>\n<p>Nevertheless, from an underwriting perspective, 2022 was a rather <span style=\"color: #90111c;\">average natural catastrophe year<\/span>. Although there were many residential building losses in Germany, unlike in the previous year, German industrial companies were largely spared.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='7'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-27  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-28  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h4>Major fires<\/h4>\n<p>2021 was also <span style=\"color: #90111c;\">the year of major fires<\/span>: A fire loss in a metal processing plant in February 2021 and in a chemical plant in July 2021 caused problems for insurers. The problem is, among other things, flammable building materials, such as insulating materials made of foamed plastics.<\/p>\n<p>Such an <span style=\"color: #90111c;\">accumulation of large fires could not be observed in 2022<\/span>. This sounds like reassurance in industrial property insurance.<\/p>\n<blockquote>\n<p>Conclusion: There is no doubt that insurance losses from natural disasters are increasing. However, it is primarily the increasing frequency of major loss events, which are difficult to predict, that is causing uncertainty in property insurance.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='8'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-30  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-31  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Excursus: Accumulation risks<\/h3>\n<h4>If already, then already<\/h4>\n<blockquote>\n<p>Accumulation risk refers to the risk that one and the same event will trigger losses for many insured persons at the same time. The current situation, characterised by the war in Ukraine, macroeconomic challenges and natural disasters, is bringing this type of risk to the fore again. For example, utility outages due to property damage currently harbour a considerable accumulation risk potential.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='9'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-33  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-34  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2>Part 2: What are the implications for industrial property insurance?<\/h2>\n<h3>Rise in the cost of claims<\/h3>\n<p>Inflation and supply chain problems are <span style=\"color: #90111c;\">making claims more expensive.<\/span><\/p>\n<p>The effects are multi-layered: as <span style=\"color: #90111c;\">replacement values<\/span> for damaged buildings, machinery and equipment rise driven by inflation, loss <span style=\"color: #90111c;\">amounts increase.<\/span><\/p>\n<p>The <span style=\"color: #90111c;\">deductibles<\/span> are reached more quickly, which also makes property insurance claims more expensive.<\/p>\n<p>In addition to the actual property damage (defective machine, burnt-down factory building), inflation also affects the other costs: clean-up work, demolition costs and protection costs, additional expenses due to official orders. These items will also show significantly higher loss amounts.<\/p>\n<p>The disruptions in supply chains mean that reconstruction or repair after a loss takes longer because spare parts, building materials or machinery can only be procured with delays. If damaged, insured companies cannot produce, <span style=\"color: #90111c;\">business interruption losses become more expensive<\/span>.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='10'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-36  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-37  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Rising retroactive losses<\/h3>\n<p>The flood disaster in the Ahr valley also placed such a heavy burden on insurers because not only direct damage was caused, but also high retroactive damage.<\/p>\n<h4>Excursus: Retroactive damage<\/h4>\n<blockquote>\n<p>Retroactive damage occurs when damage to one of your suppliers or customers leads to a loss of earnings in your own company. You yourself have not suffered any material damage. This means that the loss of suppliers or customers and the resulting loss of earnings represent a risk for your own business against which you can insure yourself.<\/p>\n<\/blockquote>\n<p>Many industrial clients have observed that their <span style=\"color: #90111c;\">limits for retroactive damages have decreased<\/span>.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='11'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-39  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-40  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Declining insurance capacities<\/h3>\n<p>Reinsurers&#8217; <span style=\"color: #90111c;\">capacities for natural catastrophes<\/span> are declining, according to Fitch. This is especially true for perils such as hurricanes in North America, earthquakes in California and Japan or floods in Germany (keyword <span style=\"color: #90111c;\">accumulation risk<\/span>).<\/p>\n<p>Ultimately, the above-mentioned effects also increase the so-called PML (<span style=\"color: #90111c;\">Probable Maximum Loss<\/span>), i.e. the probable maximum losses, which also leads to increased capacity requirements for industrial property insurance.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='12'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-42  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-43  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Rising <span style=\"color: #90111c;\">premiums<\/span><\/h3>\n<p>High inflation rates and rising claims costs are whirling up prices in commercial and industrial property insurance. Even the financial supervisory authority Bafin warns of &#8220;<span style=\"color: #90111c;\">compellingly higher premiums<\/span>&#8220;.<\/p>\n<p>On the one hand, the often existing <span style=\"color: #90111c;\">value adjustment clauses<\/span> in the insurance contracts lead to the <span style=\"color: #90111c;\">automatic adjustment of the sums insured<\/span> (we will come back to this later). With increasing sums insured or increases in the price indices, the <span style=\"color: #90111c;\">basis for calculating premiums<\/span> also increases.<\/p>\n<p><span style=\"color: #90111c;\">Adjustment clauses for the premiums<\/span> themselves also allow insurers to increase premiums.<\/p>\n<blockquote>\n<p>In the end, it seems obvious: if claims and risks increase, insurance premiums must rise.<\/p>\n<\/blockquote>\n<p>And not only do premiums and other conditions have to keep up with the claims, but also the <span style=\"color: #90111c;\">risk buffers<\/span> to match the increased <span style=\"color: #90111c;\">volatilities<\/span>.<\/p>\n<p>How much an insurer turns the price screw depends on the <span style=\"color: #90111c;\">competition, its own strategy and financial strength<\/span>.<\/p>\n<blockquote>\n<p>We have found data and received statements quoting premium surcharges of between 10 % and 25 % for industrial property insurance, other sources even mention premium increases of 30 % to 40 %.<\/p>\n<\/blockquote>\n<p>The increase for factory buildings is seen at the lower end of the range (more like 15 %) and that for commercial and technical equipment at the higher end (more than 40 %) &#8211; as of today.<\/p>\n<p>The premiums will therefore rise. All the same &#8211; and this is the common thing in the current situation &#8211; <span style=\"color: #90111c;\">with a delay<\/span>.<\/p>\n<p><span style=\"color: #90111c;\">The reason for this<\/span> is that although the price development is continuously recorded by the Federal Statistical Office, the indices derived from this are produced with a time lag. The respective adjustments are then made with a further time lag in the following year.<\/p>\n<blockquote>\n<p>Industrial insurance will therefore experience the full force of inflation in 2022 now, with the renewals in 2023.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='20'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-45  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-46  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Underinsurance in industrial property insurance<\/h3>\n<p>At the same time, there is a <span style=\"color: #90111c;\">risk of underinsurance<\/span> &#8211; despite the adjustments to the tariffs.<\/p>\n<p>This happens, on the one hand, when the insured value of buildings, machinery and goods is now significantly greater than the sum insured due to inflation.<\/p>\n<p>At the same time, supply chain problems and price uncertainties lead companies to <span style=\"color: #90111c;\">change their purchasing policy<\/span>: they buy more in stock and increase their inventories.<\/p>\n<p>All this can lead to agreed indemnity sums no longer being sufficient to cover the damage in the event of a loss.<\/p>\n<p>The consequences of underinsurance can have a <span style=\"color: #90111c;\">significant impact on companies in the event of a claim<\/span>. This is because insurers <span style=\"color: #90111c;\">reduce compensation payments proportionately<\/span> if the sum insured is lower than the actual insured value.<\/p>\n<blockquote>\n<p>Practical tip: Important for you as a company: The responsibility for the correct sum insured lies with you! The insurer is usually only interested in the correctness (or incorrectness) of the sum insured in the event of a claim &#8211; i.e. when it is too late.<\/p>\n<\/blockquote>\n<p>In this <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.sv-merker.de\/en\/rising-machinery-prices-in-property-insurance\/\">article we have dealt in detail with the dangers of underinsurance<\/a><\/span>.<\/p>\n<p>In the current situation, unfortunately, it is also no longer ensured that the contractually agreed <span style=\"color: #90111c;\">value adjustment clauses<\/span> sufficiently reflect the increased insured values.<\/p>\n<p>The &#8220;time gap&#8221;, i.e. the <span style=\"color: #90111c;\">temporary underinsurance<\/span> due to disproportionately rising indices, is also at the <span style=\"color: #90111c;\">expense of policyholders<\/span>.<\/p>\n<p>On the other hand, however, <span style=\"color: #90111c;\">sum limits<\/span> are sometimes necessary in industrial property insurance in order to make a risk insurable at all in terms of capacity.<\/p>\n<blockquote>\n<p>Conclusion: Insurance premiums in industrial and commercial property insurance will rise. Many companies are rushing into unintentional underinsurance.<\/p>\n<\/blockquote>\n<p>What can you do?<\/p>\n<p>That is the subject of the third and final part of our article.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='13'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-48  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-49  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h2>Part 3: What courses of action do you have?<\/h2>\n<h3>Higher deductible<\/h3>\n<blockquote>\n<p>Review the amount of your deductibles.<\/p>\n<\/blockquote>\n<p>These also erode much faster due to inflation. Ideally, these should be <span style=\"color: #90111c;\">adjusted steadily or ratably<\/span> with price trends to guard against painful jumps.<\/p>\n<p>In the future, you can assume even more risk and pay less premium by agreeing to even higher deductibles.<\/p>\n<p><span style=\"color: #90111c;\">Higher business interruption deductibles<\/span> &#8211; set in days or percentages &#8211; are also possible.<\/p>\n<blockquote>\n<p>In case of doubt, you should discuss with your insurance broker how much risk you are willing or able to bear.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='14'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-51  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-52  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Cancellation and tariff change<\/h3>\n<p>Of course, you can object to the premium increases or even cancel the policy.<\/p>\n<blockquote>\n<p>But be careful! In the current situation, you should definitely have a written commitment on the table from the old insurer before finally quitting, because the decreasing capacities and limits at the property insurers prohibit too much optimism.<\/p>\n<\/blockquote>\n<p>In principle, you can only terminate your policies at the end of the contract. But: If a premium increase due to higher losses is added to the automatic new value adjustment, there is usually a special right of termination.<\/p>\n<p>A high-performance insurance broker will also show you whether a change of tariff or a change of property insurer makes sense.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='15'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-54  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-55  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>The risky way: not adjusting the sum insured<\/h3>\n<p>Not adjusting the sum insured i<span style=\"color: #90111c;\">s not advisable<\/span> in the current situation, because you will be heading for <span style=\"color: #90111c;\">underinsurance<\/span>. (Unless the previous sum insured was much too high &#8211; in which case you would have visibly paid too much premium in the past).<\/p>\n<blockquote>\n<p>Expect that the insurer will cancel any underinsurance waiver if you do not go along with the adjustment.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='16'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-57  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-58  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>The better way: Adjust sums insured<\/h3>\n<h4>The right sum insured in industrial property insurance<\/h4>\n<p>Make no mistake about it: For a loss to be fully compensated by the insurer, <span style=\"color: #90111c;\">the sum insured must always correspond to the insured value<\/span>.<\/p>\n<blockquote>\n<p>This means that there is no way around a careful review and adjustment of the sums insured.<\/p>\n<\/blockquote>\n<p>In most property insurance contracts, the <span style=\"color: #90111c;\">replacement value<\/span> is insured. In the case of buildings, this is the current cost of a similar new building, including planning costs, and for commercial and technical equipment, the cost of similar new machines, computers and desks.<\/p>\n<p>There are basically two ways to adjust the sum insured to the new values:<\/p>\n<ul>\n<li>by adding value<\/li>\n<li>by recalculating the sum insured<\/li>\n<\/ul>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='17'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-60  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-61  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h4>Adjustment of the sum insured through value adjustment clauses<\/h4>\n<p>Insurance contracts contain so-called <span style=\"color: #90111c;\">adjustment factors<\/span>, which are intended to protect against underinsurance due to inflation.<\/p>\n<p>The adjustment factors include the increases in labour and material costs determined by the Federal Statistical Office. Thus, the <span style=\"color: #90111c;\">sums insured increase automatically<\/span>. So far, so normal.<\/p>\n<p>However, due to current developments, the adjustment factors have <span style=\"color: #90111c;\">risen above average<\/span> as of January 2023. For example, the indices for buildings will rise by almost 18% and for technical and commercial equipment it will be 30% and more.<\/p>\n<p>In addition, uncertainties and volatilities result in further problems:<\/p>\n<ul>\n<li>Nobody knows whether the current adjustments will be too high or low.<\/li>\n<li>Already when comparing buildings and furnishings, it becomes clear that the indices develop differently. If you now look, for example, at the current indices for energy (oil and natural gas + 337.3 %), wages (real wage decline &#8211; 5.7 % in the third quarter of 2022) and software (+ 3 % in the third quarter of 202), it becomes clear that across-the-board adjustments do not reflect reality.<\/li>\n<\/ul>\n<p>Hence our recommendation:<\/p>\n<blockquote>\n<p>Let us draw up an individual adjustment of the factors for you. It is possible that the inflation for your own machinery is significantly lower!<\/p>\n<\/blockquote>\n<p><span style=\"font-size: 18px;\">However, your individual inflation may also be higher, in which case you have at least averted the danger of underinsurance.<\/span><\/p>\n<p>Because:<\/p>\n<p>If you make an individual adjustment, experience shows that insurers will check more intensively in future claims whether the sum insured is sufficient and there is no underinsurance.<\/p>\n<blockquote>\n<p>Practical tip: We take responsibility for our clients to ensure that the sum insured is correct!<\/p>\n<\/blockquote>\n<p>Furthermore, it should be noted that the <span style=\"color: #90111c;\">value adjustment clause is only known in this way for German insurance contracts<\/span>. This automatic adjustment is not provided for risks abroad.<\/p>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='18'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-63  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-64  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h4>Recalculation of the sums insured<\/h4>\n<p>It is even safer and more accurate to recalculate the total sum insured individually. Because:<\/p>\n<blockquote>\n<p>Even an individual index does not capture whether all items to be insured are correctly covered at all.<\/p>\n<\/blockquote>\n<p>An example:<\/p>\n<p>Often, new machinery is added to the insurance, but no longer existing machinery is taken out with the correct new values. The bottom line is that &#8220;far too much&#8221; would be insured. We give further examples in this <span style=\"text-decoration: underline; color: #90111c;\"><a style=\"color: #90111c;\" href=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/AssCompact-Artikel.pdf\">article in ASS<\/a><a style=\"color: #90111c;\" href=\"https:\/\/www.sv-merker.de\/wp-content\/uploads\/AssCompact-Artikel.pdf\"> Compact<\/a><\/span>.<\/p>\n<blockquote>\n<p>Practical tip: The insurer must react to this immediately, as the so-called &#8220;insured interest&#8221; has ceased to exist!<\/p>\n<\/blockquote>\n<p>If you have the sum insured recalculated, you can precisely differentiate between the insurance for the <span style=\"color: #90111c;\">business premises and furnishings.<\/span> We have described why this is important in <span style=\"text-decoration: underline; color: #90111c;\"><a style=\"color: #90111c;\" href=\"https:\/\/www.sv-merker.de\/en\/operating-equipment-operating-buildings-2\/\">this article<\/a>.<\/span><\/p>\n<p>If you take another look at the adjustment factors (building 18 %, furnishings over 30 %), it becomes clear that a part of the building that has accidentally ended up in the furnishings is certainly not a good idea at the moment.<\/p>\n<p>In some property insurance policies, there is the possibility of an <span style=\"color: #90111c;\">equalisation of sums<\/span> between building and furnishings. But even this potential is likely to erode very quickly at present due to inflation.<\/p>\n<p>In addition to the sum insured for buildings and furnishings, the <span style=\"color: #90111c;\">sum insured for inventories<\/span> (e.g. raw materials, semi-finished and finished products or packaging) should also be critically examined. There are usually no automatic adjustment factors for this.<\/p>\n<blockquote>\n<p>Practical tip: Adjusting sums insured in industrial property insurance is our &#8220;bread and butter&#8221; business. Do not hesitate to call us. We will be happy to advise you.<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='19'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-66  el_after_av_section  el_before_av_section   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div class=\"flex_column av_four_fifth  no_margin flex_column_div first  avia-builder-el-67  avia-builder-el-no-sibling  \" style='background: #f8f8f8; padding:50px 50px 20px 50px ; background-color:#f8f8f8; border-radius:0px; '><section class=\"av_textblock_section  av-mini-hide\"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '  style='font-size:18px; '  itemprop=\"text\" ><h3>Adjusting liability periods in loss of earnings insurance<\/h3>\n<p>One last important tip that may cost you money, but can take significant risk off your business:<\/p>\n<blockquote>\n<p>Check the liability periods in the business interruption insurance!<\/p>\n<\/blockquote>\n<p>In many cases, 24 months is appropriate at the moment, because supply bottlenecks extend the downtimes.<\/p>\n<blockquote>\n<p>Conclusion: We have to deal with the uncertainties in the world. However, to a certain extent it is up to us to ensure that the insurance policy, of all things, does not become a factor of uncertainty!<\/p>\n<\/blockquote>\n<\/div><\/section><\/div>\n\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='6'  class='avia-section main_color avia-section-no-padding avia-no-border-styling avia-bg-style-scroll  avia-builder-el-69  el_after_av_section  el_before_av_four_fifth   container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'>\n<div  style='height:100px' class='hr hr-invisible   avia-builder-el-70  el_before_av_one_fourth  avia-builder-el-first '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_fourth  flex_column_div av-zero-column-padding first  avia-builder-el-71  el_after_av_hr  el_before_av_three_fourth  \" style='border-radius:0px; '><div  class='avia-image-container  av-styling-circle    avia-builder-el-72  avia-builder-el-no-sibling  avia-align-center '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\"  ><div class='avia-image-container-inner'><div class='avia-image-overlay-wrap'><img class='avia_image' src='https:\/\/www.sv-merker.de\/wp-content\/uploads\/Ohne-Titel-1000-x-1500-px-2-300x300.png' alt='Philip Merker Expert for the appraisal of machinery and technical equipment' title='Philip Merker  Expert for the appraisal of machinery and technical equipment' height=\"300\" width=\"300\"  itemprop=\"thumbnailUrl\"  \/><\/div><\/div><\/div><\/div><div class=\"flex_column av_three_fourth  flex_column_div av-zero-column-padding   avia-builder-el-73  el_after_av_one_fourth  el_before_av_hr  \" style='border-radius:0px; '><section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>Philip Merker, MBA<\/p>\n<div>\n<div>\n<div>\n<h2><a href=\"https:\/\/www.sv-merker.de\/en\/\">Merker Industriebewertungen<\/a><\/h2>\n<\/div>\n<section>\n<div>\n<p>Certified expert for the evaluation of machinery and technical equipment (DIN EN ISO \/ IEC 17024)<\/p>\n<p>M\u00f6nckebergstra\u00dfe 5, 20095 Hamburg<\/p>\n<p>Telephon +49 40 602 13 33<br \/>\n<a href=\"https:\/\/www.sv-merker.de\/en\/contact\/#contactform\">Email \u00adpm@sv-merker.de<\/a><\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div><\/section><\/div><div  style='height:100px' class='hr hr-invisible   avia-builder-el-75  el_after_av_three_fourth  avia-builder-el-last '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<\/div><\/div><\/div><!-- close content main div --><\/div><\/div><div id='after_section_23'  class='main_color av_default_container_wrap container_wrap fullsize' style=' '  ><div class='container' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-7006'><div class='entry-content-wrapper clearfix'><div class=\"flex_column av_four_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-76  el_after_av_section  avia-builder-el-no-sibling  \" style='border-radius:0px; '><p><div  style='padding-bottom:0px; font-size:24px;' class='av-special-heading av-special-heading-h3  blockquote modern-quote  avia-builder-el-77  el_before_av_codeblock  avia-builder-el-first  av-inherit-size '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Best practices around insurance values and machinery valuation &#8211; delivered to your inbox once a month!<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div><br \/>\n<\/p><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":5,"featured_media":6861,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-7006","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts\/7006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/comments?post=7006"}],"version-history":[{"count":12,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts\/7006\/revisions"}],"predecessor-version":[{"id":7042,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/posts\/7006\/revisions\/7042"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/media\/6861"}],"wp:attachment":[{"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/media?parent=7006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/categories?post=7006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sv-merker.de\/en\/wp-json\/wp\/v2\/tags?post=7006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}