Hannover Re’s E+S Rück forecasts nat cat reinsurance demand, improved prices and terms

Commenting on its expectations for the end of year reinsurance renewals in Germany, Hannover Re’s German subsidiary E+S Rückversicherung AG has said that it expects demand for property catastrophe reinsurance to rise further, while risk adjusted price and term improvements are also expected.

The expectations comes after continued losses from severe weather and natural catastrophe events in Germany and the company is forecasting “further price increases and improved terms and conditions in the 1 January 2025 renewals in property and casualty reinsurance.”

“For a number of years now, the insurance industry in Germany has been faced with numerous natural catastrophes causing considerable losses and damage. Once again this year, we have already seen devastating floods, following extraordinary severe weather events of previous years with hail and heavy rain, as well as flash floods and winter storms. At the same time, motor insurance remains in deficit for structural reasons. We are also concerned about increased loss advices from our clients for prior-year claims,” explained Michael Pickel, Chief Executive Officer of E+S Rück, speaking at the reinsurance meeting in Baden-Baden. “As a reliable partner for our clients, we always offer them the best possible reinsurance capacities and support them actively in managing claims. Adequate prices, terms and conditions are absolutely essential for this.”

E+S Rück explicitly points to non-proportional reinsurance as an area that both price and term improvements are required, highlighting “rather low retentions”, while also saying proportional reinsurance treaties also need adjustments.

The company notes that flooding has driven natural catastrophe claims this year, with 2024 expected to result in “considerable losses from natural disasters.”

Leading the reinsurer to predict that, “For the coming year, E+S Rück anticipates growing demand overall for natural catastrophe covers, combined with a sharp increase in purchased capacities, while at the same time prices and terms and conditions will show further risk-adjusted improvements.”

“Particularly given the current state of the market, we aim to be a reliable partner for our clients and continuity will remain a key factor in our future success,” Thorsten Steinmann, a member of the E+S Rück Executive Board, who will take over as Chief Executive Officer of E+S Rück starting 1 January 2025 said. “Going forward, as in the past, we see a wide range of opportunities to profitably grow our business together with our clients. I am convinced that we will achieve this by building on our proven strengths and continuing to evolve.”