Global reinsurer Hannover Re expects generally risk-adequate rates for the January 1st, 2027, treaty renewals in its book of property and casualty reinsurance, with terms and conditions likely to “remain broadly unchanged.”
At Hannover Re’s press briefing in Monte Carlo at the 68th RVS, the reinsurer confirmed that it plans to make “at least stable reinsurance capacities” available for the 1.1 renewals, so long as risk-adequate prices can be obtained.
“We grow where prices are commensurate with the risks and relinquish business that does not meet our profitability requirements. Growth opportunities are expected in regions with increasing insurance penetration and economic growth as well as in markets where we expand our shares selectively,” said Sven Althoff, Executive Board member for Hannover Re’s property and casualty reinsurance.
“Thanks to our low expense ratio, pure-play focus on reinsurance and long-standing customer relationships, we are able to benefit from these profitable growth opportunities while at the same time securing our profitability on a lasting basis,” added Althoff.
The large European reinsurer sees strong demand for “high-quality and reliable reinsurance protection” in segments like cyber, structured reinsurance, and natural catastrophe covers, and sees additional momentum from regulatory changes, technological advances, the shifting risk landscape due to natural perils and growing regional economic activity, notably in emerging markets.
In terms of regional developments, Hannover Re states that prices and terms and conditions in Europe showed a broadly stable development, with still high demand for protection in Northern European markets.
The reinsurer also feels that the long-term prospects in the Middle East remain positive despite geopolitical uncertainties, driven by comparatively low insurance penetration and sustained economic growth.
In North America, sufficient reinsurance capacity is, on the whole, available to cover the rising demand for insurance protection, with the market for property still able to maintain a risk-adequate level even though clear indications of rate reductions are emerging, according to Hannover Re.
The reinsurer says that it asserted its strong market position in a highly competitive Asia-Pacific landscape. In this region, the firm anticipates broadly stable or slightly softer reinsurance rates for 2027.
In Australia and New Zealand, Hannover Re says that it “cemented its market position” and grew cooperation with core clients in its reinsurance business.
In Latin America, the reinsurer foresees growing demand for reinsurance in markets impacted by major natural catastrophe events.
Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, said: “Growing uncertainties combined with intensifying competition are causing increasing headwinds for the reinsurance industry. Geopolitical tensions, inflation, digital threats and climate-related risks make it more difficult to evaluate long-term claim costs and hence risk-appropriate pricing.
“Drawing on our thorough risk assessment, capital strength, lean operating model and consistent underwriting discipline, we create the basis for profitable growth across market cycles – both for our clients and for Hannover Re.”
Overall, Hannover Re has observed that the property and casualty reinsurance markets continue to present a differentiated picture, noting that increased competitive pressure was evident for nat cat covers and in business that had not incurred losses, while prices in other segments remained stable.
Further, terms and conditions also remained largely on a good level, with softening seen only in isolated cases, according to Hannover Re.
