Secondary perils and civil unrest are redefining property landscape: Swiss Re

The global property reinsurance market is entering renewals in a state that is both competitive and disciplined. This is according to Mohit Pande, chief underwriting officer, property, at Swiss Re, who told Monte Carlo Today the property market was “coming from a position of relative strength”.

Key points:
Forward-looking science guides nat cat view
Wildfires demand better codes, zoning and modelling
AI-based wildfire models improve underwriting insights

He added that the market was highly heterogeneous, shaped by geography, product and risk class. Yet one common theme persists: the risk landscape is rapidly evolving. Pande said: “We expect the demand for reinsurance protection to grow as the underlying exposures grow and loss trends increase. Click here to watch the full interview.

“Our approach is built on balanced risk sharing and risk adequate pricing, two fundamentals that allow us to provide sustainable and consistent capacity.”

That sustainability will need structure, and Pande said: “We will differentiate clients and partner with carriers who have underwriting discipline and whose portfolios we can underwrite with confidence.” In this dynamic and uncertain market, consistency of capacity becomes a strategic advantage.

If climate presents one axis of challenge, geopolitics provides another. Strikes, riots and civil commotion (SRCC) exposures have surged. “We’re seeing a dramatic increase in SRCC-related claims globally, with an increase of more than 3,000% between the period from 2000 to 2020,” Pande noted. In just the past 12 months, 70 countries have experienced significant protest activity amid populist and anti-establishment sentiment.

For reinsurers, the answer lies in a “holistic view” across risk, underwriting discipline and accumulation management. “The geopolitical environment remains volatile and is conducive to elevated SRCC risk. The industry will have to remain agile, data-driven and proactive in adapting its risk framework to ensure resilience through these turbulent times.”

Natural catastrophe risk assessment lies at the heart of Swiss Re’s outlook, and the company relies on a dedicated team of more than 50 scientists and engineers to ensure its view of risk evolves with climate variability and socio-economic shifts. “We collaborate with scientific and academic institutions to make sure their findings make their way into our models,” Pande explained.

“Wildfires contributed 7% to global insured losses, a five-fold increase over the prior decade.”

Beyond advanced modelling, he identified two crucial ingredients: accurate exposure information with up-to-date valuations and policy terms, and timely, transparent data-sharing across the insurance value chain. “As a science and data-led organisation, we bring in proprietary modelling and deep market insights to ensure our risk assessments are forward-looking and relevant.”

The challenge is no longer only in primary perils. “If you look at the last five years, secondary perils have contributed 60% to the global insured losses, which is up from 50% over the past 30 years,” Pande stated. This shift is driven by exposure growth in urbanised, vulnerable areas; a warming climate that intensifies weather patterns and fragility in assets such as solar panels. These trends, he warned, were “a bellwether for primary perils, because the underlying conditions are equally relevant to both.”

As well as hailstorms and floods, wildfires have been climbing sharply: “Between 2015 and 2024, wildfires contributed 7% to global insured losses. That’s a fivefold increase over the prior decade.” The Los Angeles wildfires in January highlighted the need for better zoning and building codes, with evidence showing stronger codes can reduce losses by up to 45%. Yet even advanced modelling cannot remove all uncertainty.

“We need to think of all potential outcomes in our decision-making, rather than anchoring our decision on one single figure such as the average annual loss,” Pande cautioned. Managing accumulation is another lesson; avoiding concentration risk is vital to curbing wildfire exposure.

Technology is reshaping how wildfires are modelled. Pande pointed to Swiss Re’s CatNet platform, which now includes a wildfire probability layer powered by machine learning developed with Google X’s innovation arm, Bellwether. “This layer provides novel risk selection insights for informed underwriting decision making, based on up-to-date information on wildfire relevant environmental conditions,” he explained.

Beyond modelling, Swiss Re engages in mitigation by supporting initiatives such as the Insurance Institute for Business and Home Safety, as well as broader public policy discussions. “No single measure or effort can eliminate wildfire risk, but we can work together by improving codes, zoning and modelling to reduce risk and losses.”