michael-pickel-1-
18 October 2021Insurance

Hannover Re E+S expects ‘markedly’ higher reinsurance prices in Germany

Analysts at German reinsurer  Hannover Re anticipate prices to go up, especially for catastrophe covers, following this summer's devastating flood losses. Accumulation of large losses from natural perils and the pandemic combined will drag on profitability caused by low interest rates and inflation, and will likely prompt many insurers to further expand their reinsurance coverage.

Hannover Re's German business E+S Rückversicherung expects “markedly” higher reinsurance prices in the aftermath of the summer's historic flood damage, which led to insured market losses well in excess of €8 billion in Germany alone.

Added to this were further hail and heavy rainfall events that also impacted the country in 2021, making it the year with the largest ever burden of insured losses from natural catastrophes in Germany.

“After the terrible severe weather events of June and July, 2021 will go down as one of the costliest years ever for the German market,” said Michael Pickel (pictured), chief executive officer of E+S Rück. “It is our expectation that many insurers will further expand their reinsurance protection in the wake of these latest losses.”

Against the backdrop of these heavy loss losses, E+S Rück considers higher prices in the reinsurance market for commercial and industrial risks to be necessary, especially under loss-impacted programmes. Moreover, it highlights that demand for high-quality reinsurance protection will continue to grow.

Pickel said: “Following on from the considerable strains incurred last year from the Covid-19 pandemic, the recent bad weather losses, low interest rates and price rises in the construction industry will lead to an appreciable increase in reinsurance prices.”

The insurer also noted that protection against cyber risks, progressive digitalisation and increasingly widespread hacker attacks are generating greater risk awareness and prompting adjustments to conditions. “Adjustments are needed for pandemic-related and cyber risks if they have not already been implemented,” it said.

Pickel concluded: “This year, as in the past, we shall work with our customers to find solutions that recognise our entire business relationship, whether it be through traditional reinsurance, tailor-made solutions or the development of innovative coverage concepts. With this in mind, I look to the current renewals with confidence.”

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
28 October 2021   The insurer’s CEO is ‘very pleased’ with growth and says the underlying loss performance was in line with its expectations.
Insurance
20 October 2021   Losses from the pandemic and flooding in its domestic market of Germany over the past 18 months have cost the carrier more than a decade’s worth of profits, showing the need for immediate rate increases, it says.
Insurance
13 October 2021   It will take a proactive role to determine the greenhouse gas emissions of customer portfolios.