Background: Central Health Insurance and Generali
The Central Krankenversicherung AG was for many years one of Germany’s largest private health insurers (PKV). It was founded in 1913 and became majority-owned by the Generali Group in 1998. In 2000, Generali merged its own health insurance business with Central, making Central a subsidiary of Generali Deutschland. In 2020, the company was officially renamed Generali Deutschland Krankenversicherung AG, and its headquarters were moved from Cologne to Munich. This step was part of Generali’s “One Company” strategy aimed at consolidating its brands. For policyholders, the change was purely nominal – existing contracts remained valid.
Boom through Low-Cost Tariffs and Subsequent Crisis
In the early 2000s, Central pursued an aggressive growth strategy based on low-cost entry tariffs for new customers. These products offered reduced benefits to attract young self-employed individuals and price-sensitive customers. The strategy was initially successful: Central grew rapidly in full health insurance, adding roughly 90,000 fully insured clients between 2000 and 2005. At that time, it ranked among the top five PKV providers. In 2009, Central achieved the strongest new business figures in its history and was named “Best Private Health Insurance” by Focus Money magazine.
However, the low-cost tariff strategy turned out to be a severe miscalculation. Premiums were set too low to cover actual expenses, forcing Central to increase prices sharply in subsequent years. Beginning around 2010, the company imposed massive premium hikes – in some cases by up to 50%. These increases angered policyholders, and the low-cost tariffs became known as a “cost trap.” Many customers could no longer afford the premiums and left. Around 2011, a wave of cancellations began: younger and healthier clients switched providers or returned to the public system (GKV) whenever possible. Central became a textbook example of aggressive short-term growth with long-term negative consequences.
Loss of Policyholders: 2005–2025
The premium increases led to a dramatic decline in the number of fully insured policyholders. The figures fell year after year for more than a decade:
- 2005: approx. 400,000 fully insured
- 2010: approx. 509,000 (peak before the crisis)
- 2011: approx. 494,000
- 2015: approx. 342,000
- 2020: just over 300,000
- 2025: approx. 290,000
In summary, between 2010 and 2015 Central lost by far the largest number of customers in the PKV market. Even after low-cost tariffs were discontinued in 2011, growth did not return. Since then, the company has continuously reported more exits than new entrants.
Near-Collapse and Generali’s Intervention
The rapid decline in policyholders severely strained the company. Although Central did not formally go bankrupt, industry observers described the situation as existential, for example, the replacement of several executives. Consequently, in 2011, management initiated a deep restructuring: Central disbanded its in-house sales force – around 970 tied agents (as of 2010) – and transferred distribution exclusively to DVAG (Deutsche Vermögensberatung). The company also closed unprofitable tariff series and shifted its focus to higher-quality products.
As a result, Generali, as the parent company, intervened to stabilize finances and streamline operations. Tariff series had to be closed and radical cost-cutting measures and restructuring implemented. As a result of the crisis, older and higher-risk policyholders dominated the remaining portfolio, which increased cost pressure. In 2020, Generali renamed the company under its own name, effectively shelving the struggling Central brand, but the policyholder structure remained unchanged.
Long-Term Consequences and Structural Problems
The evolution of Central/Generali Health Insurance illustrates the long-term risks of short-term expansion strategies in private health insurance:
- Risk Structure and Premiums: The loss of young, healthy customers deteriorated the risk mix, leaving older, high-claim policyholders. This further increased pressure on premiums.
- Reputation and Trust: For years, Central became synonymous with steep premium jumps and dissatisfied clients. This damaged reputation made new business acquisition extremely difficult. The rebranding to Generali aimed to distance the company from the negative image.
- Shrinking Market Share: A former top-tier insurer became a mid-sized player. Fewer customers reduced economies of scale and increased administrative cost ratios.
- Legacy Contracts and Tariff Change Issues: Many policyholders attempted to switch internally to cheaper tariffs. Central faced criticism for obstructing these moves. These legacy contracts remain burdensome due to their high benefits and the difficulty of adjusting them.
In summary, the former Central Krankenversicherung suffered a severe structural crisis due to its rapid-growth strategy. The loss of more than 200,000 policyholders – from around half a million in the mid-2000s to roughly 300,000 today – is unparalleled in the German PKV market. The long-term effects include an aging and costly portfolio, continuing premium pressure, and a loss of public trust. Generali will need decades to overcome the existential crisis and the unhealthy and aging insurance portfolios. Above all, the continuous decline in the number of insured persons continues to make this restructuring difficult.
Sources
- Generali Deutschland press release, 2020: Rebranding of Central Krankenversicherung AG.
- Versicherungsbote, 2020: Generali turns Central into Generali Health Insurance.
- Versicherungsmagazin, 2011: Central Health Insurance ends broker business.
- Focus Money, 2009: Central Health Insurance – Best PKV of the Year.
- Map-Report 2016 / Versicherungsbote: Policyholder development of PKV companies.
- KVoptimal.de, 2017: Central Health Insurance – drastic decline in policyholders since 2010.
- Pfefferminzia, 2024: PKV industry ranking – premium income and market share 2024.
- Handelsblatt, 2011: Low-cost tariffs push Central into crisis.
- Süddeutsche Zeitung, 2012: Central Health Insurance: Out of the cost trap.
- BaFin reports and annual statements of Central Krankenversicherung, 2005–2019.