Munich Re has noted that the frequency and severity of weather-related natural catastrophes are increasing in Europe, with an “unprecedented” series of events exceeding the €1 billion mark this year. However, Clarisse Kopff, a Member of the Board of Management, suggests the firm “is in a good position to carry highly relevant risks.”
According to Munich Re, insurance markets are currently challenged with growing uncertainty tied to inflation, geopolitical crises, rising cyber risks, and an increased frequency and severity of natural events, to which Europe is no exception.
In September, Europe witnessed extreme weather events including heavy rainfall, flooding, flash floods and severe hailstorms, producing overall claims expenditures that were “a major burden for insurers.”
Munich Re said that individual insured market losses per event more often cross the €1 billion mark per event. According to the firm’s analysis, at least seven natural catastrophes in Europe fall into this category.
“As a leading provider in Europe, Munich Re is able to allocate additional capacities for natural catastrophes and other types of risks, provided that appropriate prices, terms and conditions can be achieved,” the firm explained.
Munich Re continued, “Both delivering added value for clients and maintaining the quality of its own portfolio are top priorities in the renewals. To achieve this Munich Re will continue to pursue a policy of disciplined, technically sound underwriting, allowing it to make capacity commitments early in the renewal process and on the basis of clear criteria.”
Elsewhere, according to Munich Re estimates, the demand for cyber risk coverage remains high, with the premium volume in Europe, the second-largest cyber insurance market after North America, amounting to $2.3bn (as of the end of 2022).
Munich Re’s Cyber Team expects a total market volume of around $8bn by 2027 with an annual growth rate (CAGR 2019–2027) of 31%.
Claudia Hasse, Head of Cyber for Europe and Latin America and Chief Executive Manager (Non-Life) at Munich Re Germany, said, “Munich Re maintains a profitable and diversified cyber book in Europe and is poised for further growth.
“We understand cyber insurance and the limits of the business. Accumulation risks need to be transparent in the portfolio and beyond. Minimum standards for cyber security have to be met. Our consistent underwriting approach is absolutely essential.”
Aforementioned Clarisse Kopff concluded, “Europe currently faces dynamic changes in the risk landscape. Due to our considerable expertise, strong diversification and scale, Munich Re is in a good position to carry highly relevant risks, such as those related to climate change or cyber-attacks, even in challenging times.
“We are willing to expand our risk partnerships with our clients. To ensure that we can fulfil our role as a risk carrier in the long term, we’re working together with our clients to adapt prices and conditions to the changing environment, exclude uncontrollable systemic risks, and jointly develop new risk solutions.”
