E+S Rückversicherung AG, the Hannover Re subsidiary responsible for the Group’s German business, has said that it expects to see rising prices and improved conditions in 2021 for property and casualty (P&C) reinsurance in Germany.
In particular, E+S Rück noted that pricing has been buoyed by COVID-19 related losses and intensification of the low interest rate environment.
On this point, the reinsurer expects to see public-private partnerships emerge between re/insurers and governments to tackle future systemic risks in Germany.
Primary insurers and reinsurers can therefore be expected to define the coverage of pandemics more clearly in their new contracts.
“Along with the direct impacts of the pandemic, the renewed decline in interest rates is taking a toll on insurance industry profits. Price increases at primary insurers are therefore absolutely essential and adjustments are also needed on the reinsurance side,” said Michael Pickel, Chief Executive Officer of E+S Rück.
“During the Covid-19 pandemic, as always, we are a reliable partner at our customers’ side and we help them to shoulder the associated challenges,” he continued.
“This includes not only providing traditional reinsurance but also assisting with claims management, offering tailored solutions for solvency relief and jointly developing new coverage concepts.”
In the German market for natural catastrophe risks, E+S Rück anticipates that reinsurance prices will improve overall due to elevated global losses this year and reduced reinsurance capacity.
The company also noted loss-making trends in the industrial fire insurance line in industrial and commercial business, which, taken together with the effects of business closures and slumps in demand, has increased the need for remediation in these areas.
For the coming year E+S Rück forecasts improved conditions on the whole in the reinsurance market for commercial and industrial risks, especially under loss-affected programmes.
“Particularly in times of crisis, we attach special priority to personal exchanges and we welcome every opportunity to meet, insofar as this is currently possible and justifiable while respecting all safety precautions,” explained Pickel.
“Through a wide range of virtual formats we are able to maintain intensive contact with the customer and always stay close at hand despite physical distancing.”
