Hannover Re looks to further price strengthening in ‘dire’ risk landscape
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Hannover Re looks to further price strengthening in ‘dire’ risk landscape


Hannover Re anticipates further strengthening of reinsurance rates and terms in a current “dire” global risk landscape.

The company said uncertainties around geopolitics, nat cat losses, inflation and social inflation were all weighing against the reinsurance industry and would drive further rate strengthening at renewals.

CEO Jean-Jacques Henchoz said: "We have achieved significantly more adequate prices and conditions during this year’s renewals.

“However, these improvements are not sufficient in view of the still challenging risk situation.”

Speaking at a press conference with journalists at the Monte Carlo Rendez-Vous, the executive said it was difficult to pinpoint any positive trends in the risk landscape.

“Obviously, the environment is quite dire,” he said.

“It is difficult to find a positive trend looming but at the same time this is what we are all about. We are managing volatility, we are helping insurance companies around the world to navigate and manage market cycles.”

Nonetheless, Henchoz said he was “quite optimistic” about the positioning of Hannover Re’s business, and that the company was looking at opportunities for continued expansion.

“I am quite optimistic about the outlook for 2024 and beyond,” he said.

“We are in a situation where we have the necessary capital base to use, and I see growth opportunities for us in many parts of the world and in many different lines of business.”

The executive said reinsurers were operating in an environment where the price of risk was increasing, with systemic risks rising.

“Society generally needs to come to terms with that,” he said. “Society needs to accept that the price of risk is increasing, and then we can have a discussion on what the best measures are between mitigation, prevention, climate-change adaptation and then insurance as a response to manage volatility.”

Sven Althoff, a member of the executive board, said North America had seen the “most prominent” changes in 2023 in property cat business, and that the market would continue to trend upwards in 2024.

He flagged high levels of loss activity, including wildfires in Canada and convective storms in the Midwest earlier this year.

The increasing impact of secondary perils on performance is an area the reinsurer is monitoring closely.

Henchoz said: “When you look at the list of large losses this year, the so-called secondary perils are becoming very important and part of the reality in managing our portfolio.”

Addressing cyber, Althoff said the market would continue to grow overall and that pricing and terms were still “relatively attractive”.

Quizzed on the issue of cyber-war coverage, which has become a major talking point in the sector, he said it was a topic Hannover Re monitors “very closely”.

“Given the more or less unlimited financial resources behind those potential attacks, it is something the commercial market needs to protect itself against,” he said.

In the specialty arena, where Hannover Re is a leading participant, the reinsurer said the market was still affected by geopolitical upheaval, which would drive pricing.

“We can expect continued good trading conditions and continuing hardening of terms and conditions,” Althoff said.

Social inflation was raised as a major hurdle in the US casualty market, with court activity and inflated jury verdicts rebounding after the pandemic, fuelled by litigation financing.

“Terms and conditions and prices will be looked at again for the North American casualty business,” Althoff said.