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After ELEMENT: act earlier than a guarantee fund
The German brokers' association AfW replied to the ELEMENT piece. On a guarantee fund we are close, on the order of things we are not: three proposals that act before the loss.
17 September 20264 min readNorman Nammert, NAMMERT Assekuradeur GmbH
The AfW, a German association of independent insurance intermediaries, replied publicly to my piece on the insolvency of ELEMENT Insurance AG. Its board member Norman Wirth writes, in essence, that an association can neither speed up the proceedings, trigger payments nor persuade an insurer to take over the book. What it can do is gather the experience of intermediaries and put it to the regulator BaFin and to lawmakers. He sees a guarantee fund as a possible way to soften the hardship.
I think that is a fair reply. On a fund we are not far apart; some economic risk belongs to a market economy. My point is the order of things. A fund only acts once the loss has happened, and it is paid for through the premiums of all policyholders.
With ELEMENT there was a clear warning sign beforehand: its reinsurance was terminated, and shortly afterwards the insurer notified BaFin that it was over-indebted. A transfer of the contracts to another insurer was only attempted during the preliminary insolvency proceedings, and it failed.
Hence three proposals. First, when an insurer loses its reinsurance, the search for a buyer should start immediately, not after the insolvency filing. Second, the regulator should publish regular updates on ongoing proceedings so intermediaries have something to tell their clients. Third, if a fund comes, it should be financed according to risk and pay open claims promptly. Otherwise the customer of a sound insurer pays for someone else's business model.
What this means for owners: whether you have a sailing yacht, a motor boat or a jet ski, the policy schedule names the insurer that carries the risk. If that insurer fails, cover usually ends one month after insolvency proceedings open and an open claim becomes a creditor claim. Reading your own contract remains the best protection.
If the AfW comments on the planned German legislation, I am happy to contribute what we learned while looking after affected clients. We still look after owners whose claims from the ELEMENT years are open, so we know which questions actually come up day to day.
Sources: AfW comment on LinkedIn on my piece, BaFin notice of 3 March 2025 on the failed portfolio transfer, BaFin and German consumer centre reports on the over-indebtedness notice (in German).
Written by
Norman Nammert
Owner, NAMMERT underwriting agent and broker · Profile on LinkedIn
Worth checking
Common questions
Can an association speed up payments to ELEMENT claimants?
No. Payments are made by the insolvency administrator under the proceedings. An association can gather experience and put it to the regulator and lawmakers.
What would a guarantee fund change?
It would take over open claims after an insolvency, fully or in part. It is to be financed by insurers, which means through premiums. It would not prevent an insolvency.
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