Reinsurance News

Hannover Re’s E+S Rück expects rising reinsurance prices in Germany

18th October 2021 - Author: Luke Gallin

E+S Rückversicherung AG, the Hannover Re subsidiary responsible for the Group’s German business, is anticipating appreciable adjustments to reinsurance prices and conditions in the property market in Germany following catastrophic weather events in the country.

hannover-re-logoIn Germany alone, low pressure system ‘Bernd’ is expected to drive insurance industry losses of more than €8 billion, while further hail and heavy rain events have also impacted the country in 2021.

Owing to these losses and the combined impacts of the pandemic, the lower for longer interest rate environment and inflation, E+S Rück says that higher prices in both insurance and reinsurance are necessary.

“After the terrible severe weather events of June and July, 2021 will go down as one of the costliest years ever for the German market,” said Dr. Michael Pickel, Chief Executive Officer (CEO) of E+S Rück.

“We extend our sympathies to everyone who has been and continues to be impacted by the disastrous flooding. As a reinsurer, we are aware of our responsibility and will play our part in overcoming the damage. It is our expectation that many insurers will further expand their reinsurance protection in the wake of these latest losses.

“Following on from the considerable strains incurred last year from the Covid-19 pandemic, the recent bad weather losses, low interest rates and price rises in the construction industry will lead to an appreciable increase in reinsurance prices,” he continued.

The company expects natural catastrophe covers in Germany to see appreciable price increases following the devastating flooding in July. At the same time, higher prices are expected in the reinsurance market for commercial and industrial risks, notably for loss-hit programmes.

Additionally, E+S Rück highlights that demand for high-quality reinsurance continues to grow.

“Just as we stood shoulder to shoulder with our customers and their insureds during the pandemic, we continue to do this in the aftermath of this summer’s devastating flood disasters,” said Dr. Pickel.

“This year, as in the past, we shall work with our customers to find solutions that recognise our entire business relationship, whether it be through traditional reinsurance, tailor-made solutions or the development of innovative coverage concepts. With this in mind, I look to the current renewals with confidence,” he added.

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