E+S Rück expects strong German reinsurance demand as competition

E+S Rück expects demand for reinsurance protection in Germany to remain strong through the upcoming renewals, despite growing competition in parts of the market.

Timed for the Baden-Baden Reinsurance Meeting 2026, the Hannover Re subsidiary said underlying risks continue to increase even after several years of relatively moderate catastrophe losses, with inflation, cyber exposures and geopolitical uncertainty adding to the pressure facing insurers and reinsurers.

Thorsten Steinmann, CEO of E+S Rück and the Hannover Re executive board member responsible for property and casualty reinsurance in Continental Europe, Latin America and North Africa, said: “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.”

He added that improved earnings and capital positions among primary insurers had created a more stable backdrop for 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,” Steinmann said.

Motor stabilises, property competition builds

German motor insurance has broadly stabilised following tariff increases in recent years, with technical results moving marginally back into positive territory.

E+S Rück said the recovery remained fragile, however, as spare parts and repair costs continue to rise faster than general inflation.

In natural catastrophe business, many customer programmes are now adequately priced for the underlying risk, but additional capacity is increasing competition and putting pressure on prices and conditions.

Recent hail losses in Switzerland, southern Germany, northern Italy and neighbouring Alpine regions were cited as evidence that underlying catastrophe exposure remains elevated.

Competition is also increasing in industrial and commercial lines, particularly industrial fire, following strong recent results and an influx of capacity.

Marine and aviation are facing a combination of geopolitical uncertainty, global claims experience and excess capacity, although E+S Rück said treaty conditions remained broadly stable.

Cyber and alternative capital

In cyber, E+S Rück said economic dependence on digital infrastructure and IT systems is growing faster than the capacity available to cover those risks.

At the same time, results across the market are coming under pressure from competition and higher capital costs.

Steinmann said: “It is particularly in this environment that reinsurance remains a key tool for reducing volatility, enabling growth and securing financial stability.”

E+S Rück also expects insurance-linked securities and other capital market solutions to play a growing role as catastrophe risk, climate change, value concentrations and protection gaps increase.

The re/insurer said ILS can complement traditional reinsurance by providing additional capital market capacity, with E+S Rück offering access to such solutions in cooperation with Hannover Re.