German Reinsurers Eye Higher Prices After Flood-Hit Year
October 18 2021 - 4:18AM
Dow Jones News
By Ed Frankl
German reinsurers said Monday that they expect higher prices in
Europe in January renewals as the industry handles major
natural-catastrophe losses and higher inflation.
Muenchener Rueckversicherungs-Gesellschaft AG and Hannover Rueck
SE's local subsidiary E+S Rueckversicherung AG said disastrous
flooding in Germany, alongside losses due to the pandemic and
rising inflation, will result in higher prices for primary
insurance and reinsurance.
"Rising prices for various assets and the latest major losses
make considerably higher reinsurance rates in Europe likely," Doris
Hoepke, member of Munich Re's management board, told the
Baden-Baden Reinsurance Meeting.
"The major losses produced by extreme flooding in central Europe
and the rise in weather events like droughts and wildfires affect
regions that, in some cases, are not characterised by risk-adequate
prices and conditions," Ms. Hoepke said.
European flooding in July, which particularly struck Germany's
Rhineland, made 2021 "one of the costliest years ever for the
German market," said E+S Chief Executive Michael Pickel.
Losses across the continent came to an estimate of 46 billion
euros ($53.35 billion), of which EUR9 billion was insured,
according to Munich Re figures.
"The influence of climate change, which makes precisely this
type of regional extreme rainfall more probable, has to be taken
into greater account in risk assessments," Munich Re added.
Higher inflation, which topped 3% in the eurozone in September,
and increased incidents of cyberattacks will also lead to higher
claims costs, the companies said.
Hannover Re also cited low interest rates and price rises in the
construction industry that will lead to rises in reinsurance
prices.
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
October 18, 2021 04:03 ET (08:03 GMT)
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