At the 68th annual meeting of the reinsurance industry in Monte Carlo, Munich Re, one of the world’s largest reinsurance companies, underlined the importance of a resilient reinsurance sector as risks are “becoming more global and more volatile.”
Munich Re describes reinsurance as society’s immune system, but warns that the industry is facing an abundance of uncertainties from the changing climate, geopolitical tensions, and rapid technological development.
The reinsurer highlights the fact insurance industry losses from non-peak perils exceeded $100 billion for the first time in 2025, as global insured losses surpassed $100 billion for the sixth year in a row.
Alongside losses from non-peak perils such severe convective storms, wildfires, and floods, Munich Re notes the rise of heat as a driver of claims, which the firm describes as a more insidious risk.
“The consequences of heatwaves have claimed a growing number of lives in recent months. Furthermore, exceptionally high temperatures, as well as floods and other non-peak perils, are having a significant impact on infrastructure and, consequently, on supply chains. They also cause considerable damage to agriculture, healthcare systems, and to buildings and technical installations.
“Consequently, such natural hazards are shifting more and more from being primarily ecological risks to economic risks, even though it is not always easy to establish a causal link in the case of heat-related damage,” said Munich Re.
As readers will be aware, the January 2025 California wildfires resulted in the greatest economic loss ever recorded for the peril at a staggering $54 billion, while Europe was also heavily impacted by fires.
“In the current situation, reinsurers play a key role in helping better understand and assess changing risks. Furthermore, they can help with prevention and resilience, and cushion claims burdens. They thus make a pivotal contribution to economic stability and to the insurability of new and existing risks,” said Munich Re.
In addition to the significant impacts of nat cats, the global reinsurer warns that risks from cyber attacks and artificial intelligence require both new risk management solutions and enhanced risk coverage. In fact, studies by the company show that 89% of firms report that they do not feel adequately protected against the increasing professionalism of attackers in an ever more complex risk landscape.
Thomas Blunck, Member of the Board of Management, Munich Re, said: “The value of reinsurance has never been more evident than it is today. A resilient reinsurance sector is capable of absorbing increasingly complex and globally interconnected risks. Offering reliable capacity underpinned by our exceptional financial strength, outstanding expertise and innovative solutions, we create stability, facilitate investment and support recovery following major loss events. These criteria are crucial to long-term economic resilience and the insurability of risks.”
Stefan Golling, Member of the Board of Management at Munich Re, underlined that “volatility is not a temporary phenomenon,” which highlights the increasingly important need for a holistic understanding of risk and broad diversification, as emphasised by the reinsurer.
“Our mission is to pool our expertise, capacity and innovative strength to help our clients remain resilient, adapt successfully to change and navigate the new risk landscape with confidence. And regardless of market cycles, this remains true: we are there for our clients – especially when they need us most,” said Golling.
According to Munich Re, reinsurance capital has grown at a rate of 5.8% per annum over the past eight years, underpinning the sector’s role as a reliable source of capital.
While the figures differ from firm to firm, all of the re/insurance brokers that have reported on the level of dedicated capital in the industry project new heights to be reached in 2026 after significant growth in 2025.
