MONTE CARLO (dpa-AFX) - The world's largest reinsurer Munich Re expects demand for reinsurance protection to continue to rise despite price hikes in property and casualty business. The global reinsurance market will grow slightly annually in the period from 2023 to 2025, even after deducting inflation, the DAX-listed group said Sunday at its annual industry meeting in Monte Carlo. The board warned of continued high inflation, which would also drive up the cost of insurance claims. In addition, the destruction caused by severe thunderstorms with tornadoes and hail is now costing the industry as much as a strong hurricane.
At the traditional "Rendez-Vous de Septembre" in the Principality of Monaco, reinsurers such as Munich Re, Swiss Re and Hannover Re have again been sounding out prices and conditions for treaty renewals at the coming turn of the year with primary insurers such as Allianz and Axa since this Saturday. In the previous renewal rounds, the reinsurers had already significantly tightened the price screws with their clients.
The industry is charging so much more for the assumption of risks from natural catastrophes and other natural hazards in particular that, according to a survey by rating agency Moody's, around nine out of ten primary insurers no longer want to cede any additional risks to reinsurers in the coming year. Accordingly, primary insurers are likely to take a larger share of future losses on their own, concludes Moody's analyst Helena Kingsley-Tomkins.
The rating agency Standard & Poor's (S&P), like Munich Re, expects demand for reinsurance protection to continue to rise. The agency's experts also attribute this to increasing losses from natural catastrophes, including the forest fires in Hawaii and southern Europe and the severe flooding in Slovenia and Austria.
Because of the sharp rise in inflation, losses are becoming increasingly expensive for insurers and reinsurers even without an increase in natural catastrophes. For this reason alone, reinsurers are trying to push through higher premiums with their customers. S&P analyst Johannes Bender expects they will succeed. "But we are not sure whether the price increases will be enough to offset inflation," he said Sunday in Monte Carlo./stw/he