Risky investments: Health insurance companies risk losing billions

Risky investments

Health insurance companies risk losing billions

Numerous health insurance companies have invested large sums in high-risk funds and lost. The possible damage could be far greater than expected.

The damage suffered by health insurance companies as a result of risky real estate investments could be significantly higher than previously assumed. In total, the health insurance companies have invested 900 million euros in promissory notes secured by real estate and around 200 million euros in bearer bonds. A total of 1.1 billion euros are considered to be “underperforming,” according to a response from Federal Government in response to a question from left-wing MP Ates Gürpinar. Investments in which the returns fall significantly short of expectations or even threaten a total loss are considered to be “underperforming”.

The possible damage is therefore noticeably higher than previous estimates. Research from “Süddeutsche Zeitung”, NDR and WDR have so far revealed that up to 500 million euros are on fire with the health insurance companies.

The possible loss could also be even higher. The federal government’s figures only refer to the 58 nationwide health insurance companies that are supervised by the Federal Office for Social Security (BAS). Regionally limited health insurance companies are controlled by the respective federal states – but the federal government has no information on this. There are also several associations of statutory health insurance physicians that have also carried out risky financial transactions.

Exactly which health insurance companies are affected is only partially known. Many health insurance companies do not provide any information when asked whether and to what extent they have invested in Verius funds, which are considered risky. The federal government also did not provide any information on this and referred to the health insurance companies’ operational and commercial secrecy.

The coffers are under pressure due to the risky investments. They are obliged to invest the funds available to them in a very low-risk manner; strict investment guidelines apply – after all, the funds are the contributions of the insured.

This is also why the question of consequences arises. However, the federal government apparently wants to take its time with this. The federal government writes that the clarification will still take time, also due to ongoing legal proceedings. Several health insurance companies and associations of statutory health insurance physicians are suing the regional court Frankfurt against the financial companies behind the Verius funds. They argue that the risky investment was sold to them as safe and they feel they have been deceived. “When this process is completed, the total loss will be reliably quantified and the need for legal changes will be examined,” says the federal government’s response.