XPRIMM: How would you assess the overall performance of the insurance and reinsurance markets in Northern, Central and Eastern Europe over the past year? What have been the most significant developments shaping the region?

Leopoldo CAMARA: Looking at the regions broadly, my main message is: 2025 was a solid year, with strong performance continuing into the current year. But like most things, when you start to look at each region, differences become visible. For instance, in Central and Eastern Europe, it was a year of exceptionally quiet natural catastrophe activity. This doesn't mean that events didn't occur –there were droughts in Romania and Poland, as well as some incidents with heavy rain. Nonetheless, both in terms of frequency and severity, things were quiet. The real question is, through what lens do we view this development? We think the appropriate view, based on long-term trends, is that 2025 and early 2026 should be seen as positive outliers. Nothing more. Exposures continue to increase with economic growth; asset values are rising; geopolitical volatility is here to stay, it seems; and supply chain disruptions of many kinds are pushing inflation higher. Once natural catastrophes return – and it's a matter of when, not if – then all these factors will exacerbate the challenges to our industry. This is why it's not possible to let our guard down. A significant part of the conversations we're having is about how we as an industry can raise awareness in increasing resilience and helping close the protection gap. As a reinsurer, we're not just here to absorb losses after large events, we are here to support our partners in the region with capital, innovation and risk knowledge.

In terms of developments that are important, we see opportunities to embed tools equipped with artificial intelligence as increasingly relevant in all our markets, providing us with some novel ways to improve underwriting, claims handling and operational efficiency – not piecemeal, but end to end; at the same time, the rapid deployment of artificial intelligence, is also a source of new risks, data needs and future insurable exposures.

In the Nordics, to give one example, secondary perils have been the drivers of losses over the last couple of years, but storm losses really never stopped happening. . Think of events like Storm Amy in October 2025, which caused power outages for tens of thousands of residents in the region. A couple of months later, Storm Hannes, or Johannes, caused similar outages, as well as losses to the forestry industry; it was perhaps the most extensive storm in a decade to hit Sweden, Norway and Finland.

Ultimately, we need to continue to diligently monitor regional loss trends, as well as global trends like geopolitical conflicts, supply chain issues and inflation and assess their impact on property and (Contingent)Business Interruption losses. It's here we can bring value by partnering with our clients to share our global perspective, risk engineering insights and economic forecasts to manage those risks together.

XPRIMM: While many CESEE markets continue to grow, insurance penetration remains relatively low compared to Western Europe. Where do you see the greatest opportunities for sustainable market development and for closing the protection gap?

L.C.: It's a good question. Natural catastrophe insurance resilience is stronger in advanced European countries than in emerging Europe. We've quantified this phenomenon, via the Swiss Re Institute Resilience Index. Part of the solution is building greater understanding in the region of the benefits that insurance offers. The relatively low insurance penetration in many CESEE markets is closely linked to the need to further strengthen trust in the insurance industry and to demonstrate more clearly how insurance supports society in becoming more resilient. How can our industry solve this? This means continuing efforts, including with other stakeholders, to improve financial literacy, especially among younger generations, and to make insurance more tangible, transparent and relevant in everyday life.

Beyond these factors, there continues to be clear structural differences between CESEE and Western Europe, including different stages of economic development and household wealth accumulation, that impact insurance penetration. As economies grow, as people accumulate valuable assets that require protection, insurance becomes a real factor. In many CESEE markets, Motor Third Party Liability still dominates premium volumes due to its mandatory nature – and the need to stay mobile. Other lines of business remain less developed, offering opportunities. In the end, increasing the relevance of insurance in the region as a safety net is a long game, one we are committed to.

Property is the most obvious area where we see significant potential, particularly with growing natural catastrophe exposures linked to economic growth, and in some instances, intensifying weather-related hazards. If there's one thing I'd like to stress, however, it's this: the key opportunity is not only to grow premiums, but to build resilience, including by bringing together diverse stakeholders to work on solutions together. Insurers, reinsurers and public authorities need to work together on awareness, affordability, prevention and risk-sharing mechanisms. There are many good examples for this – let‘s learn from each other!

We also see further opportunities in SME protection, cyber, health and life insurance, where economic growth and changing customer needs are creating new demand. Sustainable market development will depend on simple products that deliver clear benefits, trusted distribution, better data and stronger partnerships across the public and private sectors.

XPRIMM: Extreme weather events are becoming more frequent and severe across Europe, while protection gaps remain significant in many countries. How has Swiss Re's assessment of climate-related risks in the region evolved, and what steps are needed to strengthen resilience among households, businesses and governments?

L.C.: Let me start globally: insured losses in 2025 remained elevated at USD 107 billion, the sixth straight year in which losses exceeded USD 100 billion. Wildfires were naturally a major source of insured losses, with the events in Los Angeles to start the year. Nonetheless, over the 12-month period, losses were below trend, in large part due to the fact that there was no landfalling US hurricane. Here's the thing, however: we see this outcome as a single year of good fortune, rather than a shift in the underlying insured-loss trajectory. The drivers of rising losses in most advanced markets are unchanged: economic growth, urbanization, and inflation are all combining to drive insured losses higher over the long term. In 2025, secondary perils like wildfire or hail were responsible for a record 92% of total insured losses; these perils are pushing the loss baseline higher, even without a peak event. Swiss Re's modelling shows that in a peak-loss scenario, insured losses could reach USD 320 billion in 2026.

If you look at Europe, we have a similar view of the trends, albeit with some regional nuances. For instance, there was intense hail on the continent, but storms in 2025 often hit areas with lower exposure, resulting in lower insured losses compared to what we saw in the United States. When you view the broader trend, however, we see insured losses from severe convective storms growing in Europe at about 10% annually. Half of this, according to our figures, comes from exposure growth. But it is also clear that shifts in storm intensity and hail severity are also playing a role. Like we've seen in places including Italy and France, vulnerability factors that come with the addition of rooftop solar capacity in hail-prone regions also appear to be contributing to rising Severe Convective Storm (SCS) losses. Regardless of geography, we believe there are some important things to consider: first, people need to be aware of their risks, so they can take proactive measures to limit losses before they materialize. There's clearly a role for the public sector in risk mitigation and adaptation efforts, but individual consumers also can play their part as "owners of risk." Once both awareness and mitigation have been suitably addressed, that's where we see risk transfer offering its greatest benefit. It may be costly to address risks proactively, but it's even more expensive to wait until after a disaster.

We have some examples here. Our experts have looked at the loss numbers and concluded that investment in flood protection in Europe has made a difference in limiting growth in insured losses. One initiative worthwhile mentioning is the Copenhagen Cloudburst Management Plan, which kicked off in 2012 after particularly intense precipitation, as a prime case study in how a city can successfully adapt to the increasing risk of heavy rains. Another striking example is the much-improved flood containment along the Danube River, in Eastern Europe: a lot has happened in the last 25 years.

As weather- and climate-related threats intensify in some regions, adaptation will be increasingly important in helping to minimize insured losses, build community resilience, and help ensure that protection remains affordable.

XPRIMM: Following several years of market corrections and repricing, how would you describe current reinsurance market conditions? Are we entering a more stable phase, and what factors are likely to shape renewals going forward?

L.C.: To start, let me offer just a few general comments: the risk backdrop is volatile and will likely remain so. Geopolitical uncertainty, societal trends, technological disruption from AI, new energy sources, resurgent inflation and extreme weather all persist Simultaneously, there is still a significant protection gap, meaning our industry has a structural opportunity to grow risk transfer and to work with our partners to support resilience-building adaptation that makes a difference.

We are experiencing a competitive market, though I would also add here that there is not a single cycle, what we see is rather a multiple of micro-cycles. We're coming into this phase after about three strong years for reinsurance. Over this period, Swiss Re has worked hard to streamline our portfolio and to strengthen the quality of our balance sheet, efforts which are benefiting us even as margins in some lines may be declining. We're staying focused on deploying our capital where the risk-return is appropriate. Swiss Re also has an emphasis on portfolio steering and maintaining our underwriting discipline. We feel confident: the strength of our balance sheet, our franchise, and our global scale are contributing to our ability to continue to support our clients and their needs.

XPRIMM: Beyond climate-related risks, which emerging threats do you believe insurers and reinsurers in the region should pay closest attention to over the next few years, and how can the industry prepare for them?

L.C.: One theme that will be important for our industry to track closely in Europe is the potential for abusive liability risk practice to spread from some Anglo-Saxon jurisdictions. There is relatively new legislation that has accelerated class action-style claims in the EU, and in the process, expanded potential insurance exposure. You also see third-party litigation funding playing a larger role. Data from key jurisdictions don't indicate that this activity is coming through in the form of claims just yet–but like any emerging risk, we will continue to analyze and track these developments carefully, to ensure that we are appropriately pricing risks and so we can have thoughtful conversations with our clients, to help them navigate potentially unfamiliar territory.

Getting back to an earlier point – with natural catastrophe claims: over the past three years or so, in places like Italy, but also in the Nordics space, loss creep has emerged as a challenge as risks change rapidly. Sometimes this is due to public policy. I'm thinking here of rooftop solar, which is vulnerable to hail. As threats change and vulnerable assets are added, we want to ensure that insurers and reinsurers are sharing the latest risk information, so that our industry isn't caught off guard by exposures when events occur. When we have good information, our premiums can accurately reflect the risk on the ground. The challenge is broad. For instance, initial loss estimates elsewhere in Europe have also had to regularly be revised upwards, with Storm Kristin in Portugal in January a recent example. For insurers and reinsurers, such adjustments increase challenges around pricing and reserving. High-quality data, combined with improved modeling capabilities and efficient claims processes, are necessary to help counteract any trends to initial underestimation of losses.

Other emerging risks I think demand attention come in the strikes, riots and civil commotion space. The geopolitical environment is volatile; with instant digital communication, there's rapid access to information and not all of it is accurate; tensions between groups within countries remain a reality, unfortunately. Meanwhile, inflationary pressures have re-emerged, impacting many people's finances. With conditions like these converging, it's important for all of us – individuals, companies, and countries – to be aware of potential flashpoints that can emerge quickly and unexpectedly. Some of the costliest episodes of civil unrest, in Europe and elsewhere, have occurred during the last quarter century or so. Continued vigilance for more of the same makes for an excellent strategy.

XPRIMM: Looking ahead, what are Swiss Re's expectations for the Northern, Central and Eastern European region over the next five years, and what will distinguish the insurers that are best positioned to succeed in this evolving environment?

L.C.: Over the next five years, we expect the most successful insurers to be those that combine disciplined underwriting of their portfolios with innovation, prevention and customer relevance. Artificial intelligence will play an important role in this evolution — from improving pricing, risk selection and claims efficiency to enabling more personalized customer solutions. We're deploying AI at Swiss Re as part of our efforts to optimize our core business processes.

AI simultaneously creates new operational, cyber and liability risks that the industry must understand and quantify. Data centers are one example – where they're being built, where are the potential accumulations, and how we can mitigate these threats. Understanding these risks is key to insuring them. But there's definitely a lot of opportunity here.

Beyond AI, we believe differentiation will come from strong data capabilities, capital resilience, proactive risk management and the ability to partner across ecosystems – including with governments, technology providers and infrastructure players. Insurers that can move from pure risk transfer towards risk prevention and resilience-building will be best positioned to succeed. With our risk knowledge, re/insurers are well positioned to inform broader adaptation measures that can help temper insured losses.

In the Nordics, as well, AI is creating both new risks and new opportunities, including a growing class of insurable assets. The region is emerging as an important European hub for data centers, thanks to abundant low-carbon renewable energy, cooler climates that help reduce cooling costs, and comparatively greater land availability. As data centers expand in size and strategic importance in the AI era, we see a clear opportunity to support our clients with both reinsurance capacity and the risk expertise needed to understand and protect these assets.

To sum things up: today’s risks are increasingly interconnected, and volatility is a persistent feature of the environment in which we operate. In this context, our role as a shock absorber is increasingly relevant – especially as geopolitical uncertainty, inflation, climate change, extreme weather and rising exposures continue to shape and reshape the risks our clients face.

Interview conducted by Daniela Ghetu