PKV Balance Sheet Rating 2020: Companies with Excellent Financial Strength

Background: Two ratings were published in late summer, both examining the balance sheet key figures of private health insurers: the MAP Report's balance sheet rating and the balance sheet rating by Morgen & Morgen. Although both ratings analyze the same key figures for the years 2016 to 2020, their methodologies differ—with Morgen & Morgen applying the stricter criteria.

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The MAP Report awards weighted points for achieved targets, independent of the industry average. For example: every insurer comfortably meets the solvency target of a 100 percent ratio. Therefore, every insurer also receives the full score for its solvency ratio—regardless of whether, like Landeskrankenhilfe, it has a solvency ratio of 998.7 percent or, like Axa, a ratio of 288.7 percent. Ultimately, every insurer achieves at least a "satisfactory" rating overall.

With Morgen & Morgen, however, it's different: evaluation is done in relation to a mean value. The foundation is a scoring system where a company's key figures are recorded on a scale from zero to one hundred. The mean value is essentially the "expected" value. A company achieving a value close to this mean receives three stars—it performs, in the literal sense, "average."

With a positive deviation beyond the standard, the insurer is certified with a "very good" (four stars) or "excellent" (five stars) performance. However, if the insurer deviates negatively from the middle range of the industry, it also receives an attestation of a "weak" (two stars) or "very weak" result.

The Divergent Results: Excellence vs. Weakness

And the results of the rating diverge significantly: nine insurers receive a "very good" rating, and five even achieve an "excellent" rating. However, six insurers also receive a "weak" rating, and four insurers even get a "very weak" rating.

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Having previously presented PKV companies with poor rating results, we now introduce those insurers that concluded the rating with five stars. A detailed report on the rating and further information are available online.

Why Financial Strength Ratings Matter for Your Health Insurance

For consumers choosing a private health insurance (PKV) provider, these financial strength ratings are not just abstract numbers. They are a critical indicator of an insurer's long-term stability and its ability to meet future claims obligations, especially in the face of rising healthcare costs and an aging population. A company with an "excellent" balance sheet is better positioned to handle financial stress without resorting to sharp premium increases or reducing service quality.

This concept is universal. When selecting any health insurance plan—whether it's Germany's PKV, a comprehensive US private health insurance policy, or evaluating providers within systems like Medicare Advantage—the financial health of the insurer is a paramount consideration. It directly impacts the security of your coverage.

Key metrics analyzed in such ratings typically include:

• Solvency Ratio: Measures capital reserves against risks.
• Combined Ratio: Indicates underwriting profitability (claims + expenses vs. premiums).
• Reserve Strength: Assesses adequacy of funds set aside for future claims.
• Investment Performance: Evaluates returns on the insurer's capital.

Choosing an insurer with top-tier financial ratings provides greater peace of mind that your private medical insurance will be reliable for decades to come. It's a crucial step in responsible health insurance planning.

Insurers and brokers struggle in claims management with high backlogs, increasing claim frequencies, skilled labor shortages, and growing customer expectations. Manual processes are expensive and slow.