Diverging Interests

Public fire insurers were divided. On one side were Bavaria, Baden-Württemberg and Hesse, with state “compulsory and monopoly institutions”  for fire insurance. In these states, all buildings had to be insured.

The monopoly institutions tended to favour a cooperative reinsurance solution via the association.

In other regions, the state monopoly had long since been abolished. These “compulsory and monopoly institutions “competitive insurers” were primarily the Provinzial institutions in the territory of the former Prussian state in Schleswig-Holstein and North Rhine-Westphalia.

The competitive insurers tended to favour establishing an external reinsurer in the form of a public limited company.

The public fire insurers operating in the Federal Republic of Germany in 1950

Schleswig-Holsteinische Brandkasse • Hamburger Feuerkasse • Hamburger Mobiliarfeuerkasse • Feuerversicherungsanstalt der Hansestadt Bremen • Feuersozietät Berlin (West) • Landschaftliche Brandkasse Hannover • Braunschweigische Landesbrandversicherungsanstalt • Braunschweigische öffentliche Mobiliarversicherungsanstalt • Lippische Landesbrandversicherungsanstalt • Oldenburgische Landesbrandkasse • Ostfriesische Landschaftliche Brandkassen • Westfälische Provinzial-Feuersozietät • Provinzial Feuerversicherungsanstalt Rheinprovinz • Hessische Brandversicherungsanstalt Kassel • Hessische Brandversicherungskammer Darmstadt • Hessen-Nassauische Versicherungsanstalt Wiesbaden • Nassauische Brandversicherungsanstalt Wiesbaden • Badische Gebäudeversicherungsanstalt • Badischer Gemeinde-Versicherungs-Verband • Württembergische Gebäudebrandversicherungsanstalt • Hohenzollerische Feuerversicherungsanstalt • Bayerische Landesbrandversicherungsanstalt • Bayerischer Versicherungs-Verband

Monopoly versus Market Logic

There were also differences in how they saw themselves: In states with a state monopoly on fire insurance, insurers at the time saw themselves more as public-law institutions than as private insurers. They were sceptical of the corporate form of a public limited company. As a rule, they were state-owned and therefore largely under the influence of regional politics. And they did not need to advertise for customers either – unlike the other public insurers. As monopoly insurers, they ultimately received new business automatically.

Greatest Interest Among the Smallest

Smaller and the smallest public insurers in particular depended on comprehensive reinsurance cover for the high-loss fire business and their significant regional exposure to natural hazards.

Establishing a strong reinsurance system was therefore of the utmost importance.