Q: Inflation is pushing prices higher across many sectors. How does this impact the pricing of legal insurance products?
A: Inflation has two major effects on pricing and premium adjustments. First, the monetary values in disputes—such as in contract or damages cases—increase. Since attorney and court fees are typically tied to the value in dispute, the cost of legal proceedings rises automatically.
Second, higher judicial costs lead to increased statutory fees for lawyers, courts, and expert witnesses. This, in turn, raises the costs borne by legal insurance providers. To continue offering reliable protection, moderate premium adjustments are periodically necessary in our industry as well. At KS/AUXILIA, our goal is always to maintain fair and affordable coverage for both brokers and clients.
Q: The number of legal disputes is rising, not least due to increasing regulation and complex legal frameworks. What strategies do insurers use to manage this trend without making the product unattractive to customers?
A: We observe not so much an increase in the number of disputes, but rather a growing diversity and complexity of legal issues. We respond with targeted solutions oriented to our clients' specific needs. A key approach is promoting alternative dispute resolution, such as mediation. This not only reduces costs but also spares policyholders lengthy and stressful court proceedings.
Another strategy is to accompany clients preventively in legal contexts. We inform and assist clients to help prevent disputes from arising in the first place. This includes services like telephone legal advice, online consultations, or chat support. Situationally, we also offer services for reviewing termination agreements, applying for disability benefits, or creating personal estate planning documents.
Q: In recent years, some companies have specialized in automated legal advice. How are LegalTech firms influencing the market? And what is your view of companies specializing in traffic legal insurance or, as recently reported, disputes around defamation?
A: LegalTech is a fascinating topic. It undoubtedly makes legal access easier for citizens, offering fast, digital solutions for specific issues like flight compensation claims. However, it does not replace comprehensive legal counsel, especially in more complex or contentious cases.
It becomes problematic when the financial interests of law firms are placed above client benefit. Not every advertisement from LegalTechs or consumer rights firms is reputable. Here, we see it as our task to guide clients through the multitude of offers and refer them to reliable partners.
Q: The insurance industry is also increasingly adopting AI-based solutions in advisory and other processes. To what extent can such technologies replace traditional legal services? Where do you see the limits? And how can AI assist a legal insurance provider?
A: AI is a helpful tool for automating routine tasks and accelerating processes—for example, in claims handling or customer service. However, it reaches its limits in complex case analysis and strategic legal advice. At KS/AUXILIA, we are exploring AI-based systems but are still far from widespread implementation. Before offering such technologies to clients and brokers, many factors must be met. An immature system could do more harm than good. The challenge lies in integrating AI's benefits sensibly into our existing processes.
Q: In which industries and professional groups do you currently see the greatest demand for legal insurance? Which target groups are particularly susceptible to legal disputes?
A: We currently see high overall demand for legal insurance, particularly due to the economic climate. The effects of inflation, uncertain employment conditions, and rising operational costs mean both businesses and private individuals are increasingly confronted with legal conflicts. Rather than singling out specific professions, it can be said that in times of crisis, nearly all areas have an increased need for protection. Businesses must contend more with labor law challenges, contract disputes, and payment defaults. Private individuals, meanwhile, face more issues in tenant law, employment law, or consumer law. Especially in uncertain times, it becomes clear how crucial reliable legal protection is to cushion financial and existential risks.
Q: Commercial legal insurance solutions for the self-employed and freelancers are expensive but often needed. How can brokers better reach this target group, and what solutions exist for smaller businesses with limited budgets?
A: Targeted advice is key here. Brokers should present industry-specific solutions tailored precisely to their clients' needs. If certain coverage areas can be excluded, there are flexible opt-out options, e.g., for real estate legal protection. This also considers the budget.
To reach commercial clients, it's first important to create awareness of the need. For this persuasion work, we offer very practical services like debt collection support, web checks, or online reputation protection for removing negative reviews. For micro-enterprises specifically, we developed affordable small business legal insurance. Combined with personal coverage, this provides a very cost-effective basic protection for startups or entrepreneurs with low turnover.
Q: Trends like fixed-term contracts, remote work, and flexible work models create new conflict areas in employment law. How can insurers provide targeted support here?
A: Legal uncertainties can arise quickly in the workplace. Our approach is not only to help when a claim occurs but to offer support early on. In most cases, a telephone legal consultation helps to get a well-founded assessment. For more complex questions, online advice via email or chat is also available.
Our policyholders have also achieved very good, out-of-court results through mediation, where a neutral mediator facilitates a solution between parties. For policyholders, these services are free and without deductibles.
Q: Doctors, nurses, and healthcare professionals often face legal challenges—from malpractice claims to employment disputes. What specialized offerings exist for this target group?
A: With the well-known and proven JURAMED product, we created specialized legal protection for healthcare professionals many years ago. JURAMED comprehensively covers both the practice and the practice owners. This includes—alongside the critically important specialized criminal defense—additional coverage like recourse defense and contract defense within the scope of core professional activities. Protection for employment disputes also includes support with termination agreements. Legal coverage for auxiliary transactions or purchased services is also part of our offering. Additionally, we provide support through web checks and the removal of negative reviews, which can be damaging for medical practices.
Q: Many brokers view legal insurance as a difficult product because clients only recognize its value in an emergency. What sales concepts can brokers use to succeed in this business area?
A: That's true—many clients only recognize the actual value when they become involved in a legal dispute and see how high the costs for lawyers, expert opinions, or court proceedings can be. Effective legal protection safeguards against existential risks here. For brokers, this also opens up an attractive business field. The line offers stable, predictable income, as customer retention is typically high. Once someone experiences the benefits of legal insurance, they usually remain a long-term client.
Furthermore, legal insurance is excellent for cross-selling: brokers who have placed disability, liability, or auto legal insurance can offer additional value with a suitable legal protection solution. A successful advisory approach is also to highlight not just the claim scenario but the numerous included services. Clients can use these proactively—like initial phone consultations or contract reviews. These "door openers" make the benefit directly tangible and significantly lower the barrier to purchase.