“We are suffering from bureaucracy burnout in Germany”

Insurers are complaining about excessive bureaucracy and calling for harmonisation of overlapping requirements. There are numerous examples of over-regulation or double regulation - when the same regulatory content is governed by different provisions at the European and national levels. “The numerous reporting obligations are eating up more and more resources", said Norbert Rollinger, President of the German Insurance Association (GDV), at the Insurance Conference in Berlin on Thursday. “For small and medium-sized companies, this is no longer tenable", Rollinger said.

Federal Minister of Justice Marco Buschmann (FDP) also spoke out in favour of relief during his appearance at the Insurance Conference. "We are suffering from bureaucracy burnout in Germany", he said. The Federal Government has set itself the goal of streamlining the rules. Buschmann referred to the Meseberg bureaucracy reduction programme, with which the Federal Government has launched a comprehensive package of measures. This would relieve companies of around EUR 3.5 billion. 

"Worst source of bureaucracy"

However, Buschmann qualified that the reduction in bureaucracy could not be achieved at the national level alone. "Sixty percent of compliance costs originate from European laws", he emphasised. The European Union (EU) is the worst source of bureaucracy. In 2022, every euro saved due to the elimination of regulations was offset by four euros in additional costs at the EU level due to new laws.

GDV President Rollinger cited the European Corporate Sustainability Reporting Directive (CSRD) as a prominent example of excessive EU regulations. The basic idea behind this is correct, but many reporting requirements do not provide any added value, he argued. "With the CSRD, let's focus on the data that provides control impulses for companies, for example in capital investment or risk management", Rollinger postulated. 

Talk of a "CSRD repair law"

Buschmann was sympathetic, even if he as the national legislator is obliged to implement the requirements of the CSRD. However, the Federal Minister of Justice announced that Germany would work together with France to ensure that the coming EU legislature would be a phase of bureaucracy reduction. This would also involve talking about a "CSRD repair law", as Buschmann called it: "If the EU takes it upon itself to withdraw some of the reporting obligations, we will support the project".

"As the largest institutional investor, we are a long-term financier for the public and private sectors", GDV CEO Jörg Asmussen underscored. Insurance companies in Germany invest EUR 300 billion every year - and are therefore a key player in financing the transformation of the economy and society. In total, the German insurance industry has investments amounting to EUR 1.9 trillion. "We are strong and stable--and therefore an ideal partner in a world full of challenges", Rollinger added.

Germany facing the challenges of a new geo-economic era 

Moritz Schularick, President of the Kiel Institute for the World Economy (IfW), outlined a new geo-economic era that includes, for example, an increase in protectionist tendencies in global trade, a sometimes critical dependence on raw materials and the need to strengthen the EU’s and Germany’s own defense capabilities in view of the increase in geopolitical conflicts. While Germany needs to become more resilient, this "de-risking" will also come at a cost. "The geo-economics of the new era will demand a lot from us", Schularick noted. Germany and Europe must also ask themselves whether they are structurally equipped for the challenges.

"Some of the structures are very encrusted", CDU Secretary General Carsten Linnemann likewise admitted. This also applies, for example, to funded supplementary pension provision, which needs to be reformed. Linnemann cited better portability in company pension schemes and a relaxation of the 100 percent Riester contribution guarantee as examples. "We have been too restrictive with the guarantee level", Linnemann said.

Retention of the annuity principle in subsidised private old age provision 

Insurers are also calling for a reform of subsidised private old age provision. The Federal Ministry of Finance, which is in charge, has announced a draft bill for this autumn. GDV President Rollinger criticised that the reform debate is focused too much on asset accumulation and that lifelong assurance is only to be one among several options. People need the security that their savings will last a lifetime, as offered by pension insurance, he maintained. A strict payout plan is unsuitable for the general population: "Old age provision that is used up by a certain birthday is more of a consumption promotion scheme for older people than a safeguard for old age", Rollinger emphasised.