Flood and hail losses demand sharper underwriting and local expertise, says VIG Re’s Ingrisch

Capacity is not the challenge. Delivering technical expertise, local market knowledge, predictability and consistency is what matters most to clients, says VIG Re's Hendrik Ingrisch.

Key points:
‘Secondary perils’ no longer secondary
Risk understanding matters more
Pricing must reflect recent losses

Recent losses in Switzerland and Austria are changing the way insurers think about catastrophe protection. Hail, convective storms and floods are moving higher up the agenda, with some buyers now sizing treaty capacity more around flood than in past years.

“For many insurers, secondary perils are no longer secondary from a loss perspective,” Hendrik Ingrisch, underwriting manager for the Nordic countries, Switzerland and Austria at VIG Re, told Baden-Baden Today.

That shift is beginning to show up in reinsurance buying and structures.

“Most clients in our markets assess their required treaty capacities today much more on flood events. The focus has shifted towards secondary perils, and reinsurance structures are increasingly reflecting today’s risk environment rather than yesterday’s assumptions.”

Reinsurance structures

For reinsurers, he added, “the solution is not simply more capacity. The solution is better risk understanding.”

The recent Swiss hail event is expected to generate around $1.2 billion (CHF1 billion) in market losses, with most of the damage linked to vehicles.

“We are increasingly seeing severe localised events capable of generating significant insured losses,” Ingrisch said. “These events can impact the insurance markets and challenge historical assumptions about frequency and severity.”

Over the past two years, he said, losses in Switzerland and Austria have come mainly from convective storms, hail and floods, while the winter storms that traditionally drew more attention have been less prominent.

That does not remove the need to prepare for major winter events. It does, however, change the mix of risks that insurers need to monitor and the assumptions that sit behind their protection.

Underwriting response

The answer is not simply to buy more cover. Exposure management, data quality and portfolio understanding are becoming more important as the pattern of losses shifts. That includes knowing where concentrations sit, how much volatility a portfolio can absorb and whether existing treaty structures still reflect the business being written.

Traditional underwriting discipline remains equally important. Ingrisch pointed to the July fire in Krokstadelva, Norway, as a reminder that large individual losses can still challenge insurers even as attention moves towards climate analytics and modelling.

“Despite all the discussion around climate and analytics, traditional underwriting fundamentals remain crucial,” he said. “Such large individual losses continue to demonstrate the importance of risk selection, accumulation management and technical expertise.”

For some clients, the event represented the largest fire loss in their history. “Clients do not judge their reinsurers only during profitable years. They judge them when challenging events occur,” Ingrisch said.

But that support does not remove the underwriting consequences. “As we are approaching the treaty renewal, our business is not a one-way street. Reinsurance pricing and terms will need to reflect the events.”

“The solution is not simply more capacity. The solution is better risk understanding.”

‘Risk is local’

The same loss event can mean something very different from one market to another. Switzerland has a strong focus on hail and flood. Austria faces similar weather risks, but Ingrisch describes it as a particularly relationship-driven market. The Nordics cover a much broader range of exposures, from Icelandic natural catastrophe risks to heavily industrialised portfolios in Sweden, Denmark, Finland and Norway.

“A one-size-fits-all approach is not successful,” he said. “Risk is local.”

That means understanding more than the peril itself. Regulation, distribution, regional concentrations and the client’s own strategy all influence how a portfolio should be assessed and reinsurance should be structured.

It is also why Ingrisch puts a greater emphasis on consistency. Clients want reinsurers whose underwriting positions do not change dramatically every time the market cycle turns, he said.

“Consistency means clients know what to expect from us. They understand our underwriting approach, know our appetite and that we will provide transparent feedback,” Ingrisch said.

“I want our clients to know what they can expect from VIG Re: technical expertise, clear underwriting positions, predictability and consistency. I am fortunate to work with a strong and experienced team. Together, we want to further strengthen VIG Re’s position as a trusted and knowledgeable partner in our markets,” he added.

The recent loss experience across his markets adds another test to that relationship. Treaty structures, pricing and exposure assumptions might need to change, but he argues those changes should be based on a better understanding of the risk rather than a simple reaction to available capacity.

As climate volatility reshapes where losses emerge, that distinction will matter more in the coming renewals.

Hendrik Ingrisch is underwriting manager for the Nordic, Switzerland and Austria at VIG Re. He can be contacted at: h.ingrisch@vig-re.com

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