Hannover’s Pickel: Bernd-hit German cat programmes face double-digit increases
Reinsurers are targeting double-digit rate increases on German cat programmes booking losses from Bernd flooding, according to Hannover Re.
Michael Pickel, CEO of the carrier’s German subsidiary E+S Rückversicherung, said: “Every reinsurance buyer has underestimated the magnitude of this loss.”
The executive cited early estimates for the insured loss from flooding caused by Bernd at EUR3bn ($3.5bn), which rapidly increased to EUR5bn, then to EUR7bn, with Swiss Re now anticipating an industry loss of $12bn.
Pickel said that, while there would be “a distinction” in price increases for cedants with and without Bernd losses, “it is very hard to find non-loss-affected” due to the scale of the disaster.
The executive made his comments at a media conference at the Baden Baden reinsurance conference today.
Pickel added his belief that it was “crystal clear” German cedants need more capacity.
“Many clients expressed a desire to seek less volatility in their results, and they will lower their retentions or buy aggregates,” he said.
“This, together with the payback for the losses we have suffered in the last year, will certainly lead to double-digit [increases] for nat-cat covers.
“To expect something which is flattish is absolutely off the table.”
In a presentation accompanying the conference, Hannover Re also said that losses and potential losses connected with Covid-19 were “often only minimally” priced into last year’s January renewals, implying that reinsurers will push for further payback for these losses at this round of negotiations.