As follows from the company’s presentation in Baden-Baden on 19 October 2026, inflation and costs continue to rise, most strikingly in property and casualty insurance. At the same time, new and more complex risk areas – including for example in cyber business – are putting increasing demands on risk management. Added to this are emerging opportunities and potential risks due to advancing digitalisation and the growing use of artificial intelligence, the implications of which for liability, cyber and operational risks cannot yet be definitively quantified. The impacts of these developments on specific areas of business vary across individual market segments.
German motor insurance, the largest line of property and casualty insurance by volume, has broadly stabilised. The tariff adjustments made in recent years are having an effect. Technical results have moved marginally back into positive territory and profitability is improving appreciably. In E+S Rück's view, however, the trend remains fragile. Costs for spare parts and repairs continue to clearly outpace the general rate of inflation and therefore remain the most significant drivers of claims inflation in the motor market.
In natural catastrophe business, E+S Rück has observed that many customers' programmes are now adequately priced to reflect the risks. At the same time, additional capacity is leading to more intense competition and adding to the pressure on prices and conditions. The recent increased expenditures caused by hail events in Switzerland, southern Germany, northern Italy and the neighbouring Alpine regions show that the underlying risks remain high. In the upcoming renewals, therefore, the individual claims experience, the quality of the programmes as well as risk-appropriate prices and conditions will continue to be decisive factors for E+S Rück.
In industrial and commercial lines, following good results of late, additional capacities – most notably in industrial fire business – are leading to more intense competition. From the perspective of E+S Rück, prices and conditions in some segments of industrial insurance are consequently coming under pressure.
The specialty lines of marine and aviation are feeling the effects of geopolitical uncertainties, the claims experience globally and an excess supply of capacity. Based on E+S Rück's observations, treaty conditions are holding stable. E+S Rück considers the individual client's portfolio quality and business performance to be crucial for risk-adequate pricing, with the company maintaining its focus on profitability and holistic client relationships.
In cyber insurance, economic dependence on digital infrastructure and IT systems is currently growing faster than the capacities made available to cover such risks. At the same time, we are seeing the results reported by many market players coming under pressure from fierce competition and the higher cost of capital.
"The moderate catastrophe losses of the past few years should not obscure what remains a demanding and highly uncertain risk landscape. Natural perils, inflation, cyber risks and geopolitical instabilities are adding to the potential for losses and confronting insurers and reinsurers alike with increasingly complex challenges. At the same time, many primary insurers have significantly strengthened their earnings and capital position. This builds stability and establishes a good foundation for the upcoming renewals. With certain segments becoming increasingly competitive, we continue to view a disciplined underwriting policy as well as risk-adequate prices and conditions as essential for ensuring the long-term availability and viability of reinsurance protection", said Thorsten Steinmann, Chief Executive Officer of E+S Rück and the member of Hannover Re's Executive Board responsible for property and casualty reinsurance in Continental Europe, Latin America and North Africa.
Source: Hannover Re.
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