GERMAN DIRECT SALES TO INCREASE: FITCH

The proportion of direct insurance sales in Germany will continue to grow, driven by the fast-growing direct motor business, by non-direct insurers expanding into direct distribution through non-motor lines and by above market-average growth of direct life business, according to a report from Fitch. The ratings agency said that cost efficiencies achieved with automated processes and standardised products were driving the success of the direct model in Germany for both non-life and life direct distribution. Stephan Kalb, Senior Director in Fitch's Insurance team said: "Not only are acquisition cost ratios lower than for traditional channels, but so are administration cost ratios." However, despite the growth in direct business, Fitch believes traditional sales channels – including tied agents, brokers and banks - will remain the most significant distribution platforms in Germany.