Nat cats to again take centre-stage in renewals: Swiss Re

The need for a coordinated approach across the entire insurance value chain has never been greater, particularly against a backdrop of intensifying natural catastrophes, geopolitical tensions and interconnected risks.

This is the view of Leopoldo Camara, who expects a continued intense focus on nat cat risks during his first Baden-Baden experience in his new role as head of P&C reinsurance for Northern, Central, and Eastern Europe at Swiss Re.

“We’ve seen multiple devastating hurricanes this year, and Storm Boris had a particularly severe impact on Eastern Europe,” Camara noted.

“The challenge of extreme weather events is huge, and it’s not one that only one element in the value chain of the insurance industry can solve alone.” 

With discussions expected to focus on the convergence of global and regional risks, Camara is set to address the pressing challenges in today’s volatile market. 

Among these, nat cats, flood risks, and macroeconomic turbulence are at the forefront of his concerns.

Camara said: “We’ll definitely be talking about natural catastrophes a lot at Baden-Baden. This year’s conference will largely be a continuation of the themes from Monte Carlo. Many of the challenges we face now are an extension of last year’s issues.”

As natural disasters intensify, Camara noted that demand for protection is increasing. 

“The global situation is more volatile than it was a year ago,” he said. “Europe is experiencing its fair share of extreme weather events,” he added, pointing out the significant damage caused by recent storms.

“Hurricane Milton was the most recent hurricane, and it was a large one, but there have been a large number of devastating storms and floods this year already. Europe is still dealing with the aftermath of Boris, and these events will undoubtedly be an important part of our discussions in Baden-Baden.”

One for all, and all for one

Reflecting on Swiss Re’s efforts to address the rising severity of these catastrophes, Camara emphasised the need for collaboration across the entire insurance ecosystem. “The industry is adapting very quickly,” he stated. “Reinsurers, insurers, brokers, governments and capital markets need to come together,” he said.

“Prevention includes the topic of where we rebuild after catastrophes.”

The theme of collaboration runs deep in Camara’s approach, particularly when it comes to natural disaster resilience. 

He highlighted prevention efforts as a crucial part of the strategy, citing examples of successful risk mitigation initiatives. “There are ways of addressing this challenge that relate to prevention. Some have worked well in many areas.

“For example, mobile dams in Austria, Czechia, and Hungary have limited flood losses in densely populated areas.

“If we continue to learn from events like these, we can build better resilience and reduce losses.

“Prevention includes the topic of where we rebuild after catastrophes, and how we manage the flooding. We’re learning all the time,” Camara added. 

This focus on resilience and prevention extends to broader risks facing Europe and beyond, and Camara pointed to the geopolitical uncertainty that has been rising across the continent. 

“Geopolitical risks have increased in the past two years with the war in Ukraine and the Middle East conflict, and political tensions are growing, also within European countries.

“In terms of technology, cyber risk is visibly on the rise, and systemic events in 2024, such as the CrowdStrike event in July, highlight the importance of managing and pricing cyber accumulation”, he said.

Beyond traditional risk transfer

With the interconnectedness of today’s risks, Camara believes that Swiss Re’s role extends far beyond traditional risk transfer. 

“Reinsurers help by providing diversification: losses don’t happen simultaneously, and pooling risks globally has been an effective model,” he said.

“Beyond risk transfer, Swiss Re develops tools and platforms that support our clients, from assessing risks to eventual settlements,” he continued.

Turning to the macroeconomic environment, Camara acknowledged that inflation and economic fragility were creating further challenges for insurers and reinsurers. 

“The economic situation in Europe feels fragile,” he said. “Inflation and valuations are creating challenges of their own. We’re seeing growing awareness about protecting valuable assets such as photovoltaic installations and better insulating materials. 

“Insured values have increased. This is something that the insurance industry can address with proper valuations, proper sums insured and proper cover,” Camara said.

“The need to stabilise global trade relationships is leading to more demand for credit and surety insurance as global trade continues, albeit with a shift toward regionalisation,” he explained. 

In it for the long haul

Swiss Re is positioning itself as a constant amid uncertain times. “Our goal is to be a steady partner to our clients,” Camara said.

“We offer expertise across various lines of business, and that makes us an attractive partner. Our ambition is to continue being transparent, predictable, and consistent.

“Whether it’s natural catastrophes, geopolitical risks, or cyber threats, we have the expertise and resources to rise to the occasion.”

As the industry continues to evolve, Camara believes that Swiss Re’s focus on consistency and transparency will help build trust with clients and stakeholders.

“Our role is to be there for our clients when they need us most,” he said.

“We want to provide consistent support, whether it’s in terms of helping them manage risk or simply being a reliable partner in uncertain times.”

Looking ahead to Baden-Baden, Camara expects the conference to provide ample opportunities to discuss key trends in the industry. 

“Given the rise in atmospheric perils and disturbances in the nat cat space, demand for re/insurance protection is growing,” he said.

As Swiss Re continues to support clients with insights, knowledge and solutions, Camara was clear that addressing evolving risks remained a top priority. 

“The re/insurance industry’s role in this space is becoming more significant, and Swiss Re intends to be a key player in driving innovation and providing solutions,” he explained.

For Camara, supporting clients with the tools and solutions essential to understand and mitigate natural catastrophe risks is an important focus in Europe, where flood risks and other secondary perils are becoming more common. 

“Different countries have taken different approaches towards the issue—and after an event such as Storm Boris spanning several countries, we have an opportunity and an obligation to learn from each other,” Camara noted.

Despite these challenges, he remains optimistic about the future of the reinsurance industry. He believes that by embracing innovation and working collaboratively, the industry can find solutions to even the most complex risks.

“The re/insurance industry has always adapted to meet new challenges,” he said. 

Camara concluded by expressing his excitement about the chance to connect with many people at Baden-Baden and explore opportunities for collaboration.

“The industry is tightly knit, and while we face some significant challenges ahead, I’m confident that together we will find the right path forward.

“Baden-Baden is a chance to reconnect with colleagues, partners and clients to discuss the challenges ahead and work together on finding the solutions we need.

“Having opportunities to get together and talk through issues is unique to our industry,” he concluded. “We must make the most of them.”

Leopoldo Camara is head of P&C reinsurance for Northern, Central, and Eastern Europe at Swiss Re.

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