In a world which is constantly heating up, literally and in a geopolitical sense, Europe is affected in its own special ways. With the last eleven years being the warmest on record so far, the risk of droughts is increasing just as much as the danger of flash floods and hailstorms, Munich Re said.

In its press release “Natural perils, geopolitical tensions, and global loss trends: Reinsurance demand strong in Europe”, the company noted that the above, and the ever-increasing value concentration as well as continued elevated inflation pushes the demand for reinsurance up. The variety of market and client situations call for a differentiated approach. Munich Re will continue to support clients in growing the insurable market and help them navigate new complexities in international exposures.

According to the company, how exposed Europe actually is from a Nat Cat perspective is demonstrated almost year by year. For example, the 2021 Ahrtal flood in Germany caused insured losses of EUR 10.9 billion, while the major Kahramanmaraş earthquake in Turkey in 2023 caused EUR 5.5 billion in insured losses. Both have been the biggest loss-events so far for both countries. Since 2020 Munich Re has continuously raised its NatCat net exposure by an annual 27% for the loss scenario Flood Germany and by an annual 10% for the loss scenario Earthquake Turkey.

Cybercrime is estimated to cause economic damage amounting to roughly USD 10 trillion worldwide. Small and medium sized enterprises still underestimate the existential threats of a hacker attack. The sizeable cyber insurance protection gap can directly impact individuals and businesses. Closing this protection gap and strengthening cyber resilience is therefore not just a strategic imperative for the insurance industry – it is a critical societal responsibility.

Munich Re continuously enhances its expertise by investing in advanced modelling capabilities and specialised cyber teams. The commitment to building cyber resilience is demonstrated through active collaboration across the industry. These efforts are designed to lay the groundwork for sustainable market growth and for a robust and future-ready cyber insurance market.

“In an increasingly uncertain environment, Munich Re will continue to play its stabilising role. Be it on climate-related perils, or effects of the geopolitical and macroeconomic instability, we will stand by our clients and provide them with the strong and sustainable support they need”, said Clarisse Kopff, Member of the Board of Management.

“Even in challenging market environments following significant loss events, Munich Re continues to show unwavering commitment to its clients, helping them manage their results and deploying or even increasing capacity for the affected markets. This is possible thanks to our strong capital position and the best geographical diversification in the industry”, commented Claudia Strametz, who leads Munich Re's business for Germany and who is responsible for cyber business in Europe.