Peak Re’s Franz Hahn says reinsurance market is ‘at an interesting point’

“The market is at a very interesting point where we see inflation, post-COVID-19 pain and nat cat development, almost certainly being driven by global warming, and specifically what we used to call secondary perils.”

That was the view of Franz Hahn (pictured), chief executive officer of Peak Re, when he spoke to Intelligent Insurer at the 2022 Rendez-Vous.

He said secondary perils have reached a point where they are of medium to large size in severity and of a high frequency, and the industry needs to find solutions.

Inflation is also affecting the market, and Hahn commented that a year or two ago people said inflation was being caused by supply chain issues and that it would “go away again”, so nobody wanted to know at the time.

“The European Central Bank has only now adjusted the interest rate, which is certainly a bit late,” he said.

He highlighted geopolitics as another market driver that is “not going away”. In Europe people often talk about the war in Ukraine when they discuss geopolitical instability, he said, but with his Asian perspective Hahn pointed to geopolitical instability and uncertainties beyond that.

“I’m coming from Hong Kong where Peak Re is based, so we are also looking at the geopolitical tensions here, their impact on the economy and the instability that COVID has brought to this region,” he explained.

Examples of widely recognised geopolitical tensions in the region include China’s relationship with the US and China’s sabre-rattling with Taiwan.

Hahn said such issues are the backdrop to what the reinsurance industry is trying to achieve. “The major driver for the insurance industry is economic growth, which is certainly being challenged,” he added.