During the Swiss Re 2023 Baden-Baden media conference, the question of the hard reinsurance market and its duration was raised ahead of the key January 1st, 2024, reinsurance renewals.
“Are we in a hard market? Is the current environment the new normal? We actually don’t know,” stated Thorsten Steinmann, Swiss Re’s Head of Property & Casualty Reinsurance for Northern, Central & Eastern Europe.
The uncertainty, he explained, is due to a myriad of factors that make it challenging to predict the future of the insurance market.
Steinmann highlighted geopolitical situations, the economic climate, and the persistent threat of inflation as significant variables influencing market conditions.
The interest rate environment was another dimension Steinmann brought to the forefront.
“Positive clearly, higher yield for the asset side of the balance sheet, on the other side, that comes at the price of higher capital costs,” said Steinmann.
“I could go on. Just think about the nat cat environment we are in, right. 100 Billion US dollar could be the new normal. Last year, it was well above the $100 billion mark, right. Secondary perils,” he added.
Steinmann concluded that he cannot provide an answer as to whether this is really a hard market, or this is the new baseline.
Reinsurance broker Gallagher Re reported earlier this week that in 2023, insured losses from catastrophe events will once again exceed $100 billion.
