European reinsurance market remains dynamic: Munich Re

The European reinsurance market remains dynamic, with demand for property reinsurance protection continuing to expand, according to Munich Re.

At this year’s Baden-Baden event, the global reinsurer revealed plans to deploy more capital in its European markets, namely where clients demonstrate underwriting discipline in their primary market.

The firm said it will also leverage its financial strength for its clients to absorb shocks that generate excessive fluctuations in their books.

As per Munich Re, analysis shows that increased natural catastrophes frequently drive insured annual losses exceeding $100 billion.

In the first half of 2024, they have already reportedly reached $62 billion, significantly above the ten-year average of $37 billion.

In Europe, there has also been a rise in non-peak perils such as floods, wildfires and severe thunderstorms which can be accompanied by hail and tornadoes.

To prepare for this, Munich Re said it continuously builds on its nat cat expertise and is explicitly capturing relevant climate change trends in its risk models.

“Reinsurers and insurers need to ensure a sound pricing system, one that correctly reflects the underlying risks and incentivises risk-reduction measures,” the firm said.

At the same time, Munich Re research shows that the cyber insurance penetration is still low, but on the positive side, the European cyber insurance market is expected to grow strongly.

The firm boasted that it continues providing significant capacity at adequate terms and conditions, while strictly adhering to not covering uninsurable systemic risks such as cyber war and failure of critical infrastructure.

Claudia Strametz, Chief Executive (Non-Life) Germany and Head of Cyber for Europe, commented, “We welcome growth but remain insistent that appropriate terms and conditions are built into the original covers as well as reinsurance contracts to ensure a sustainable (re-)insurance market.

“By leveraging our technical expertise we support our clients in overcoming their challenges. We remain strongly committed to our home market Germany and the other European markets, and continue to be a reliable and predictable partner for our clients.”

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