P&C reinsurance prices increases to continue at 1.1: E+S Rück
Hannover Re German subsidiary E+S Rück has stated that it expects further price increases and improved conditions for P&C reinsurance renewals at 1 January 2024.
E+S Rück said that natural disasters and persistently high inflation have again "taken a toll" on the German insurance industry, resulting in an ongoing rise in reconstruction and repair costs which continue to adversely impact the insurance sector's profitability.
Michael Pickel, CEO of E+S Rück said: "We must assume that the multi-year trend towards higher claim payments will continue. Adequate prices are indispensable if we are to be able to offer our clients the best possible reinsurance capacity in the future, as we have in the past.
"Particularly at a time of many different interrelated challenges, it is therefore vital for us as a reinsurer to tackle these issues and design solutions jointly with our partners."
The subsidiary noted that while losses under natural catastrophe covers were "below average" in the first six months, considerable claims expenditure was incurred in August from a series of storms centred on southern Germany.
It expects 2023 to see substantial losses overall from catastrophe covers and noted that prices for catastrophe covers look set to increase further.
E+S Rück also anticipates that sustained high rates of inflation as well as the trend towards adding natural perils covers to existing contracts will drive claims expenditures for the industry even higher in the future.
Capacities on the reinsurance market remain tight overall, it said, while demand for natural perils coverage is on the rise.
In the cyber market, the reinsurer said that the capacities offered by existing and new market players for cyber covers should result in price stabilisation on a higher level.
In view of rising claims expenditures, however, the pressure to make adjustments remains, it added.
Controlling and limiting cyber accumulation scenarios have taken on added relevance, as apparent in contract terms and conditions, according to the German subsidiary.
Pickle added: "Despite the challenging market environment, I am confident about the upcoming renewal round, because our customer relationships and thus also the upcoming negotiations are always characterised by a cooperative partnership with all market participants."