Worries on pricing, interest rates, revealed by Intelligent Insurer’s Baden-Baden survey

Attendees at this year’s reinsurance meeting in Baden-Baden, the first in-person event for three years, are most concerned by rate increases and shortages in capacity as well as inflation, judging by the results of a survey sent out in advance of the event by Intelligent Insurer.

Almost 80 percent of respondents indicated they are concerned by rate hikes and capacity shortages as they sit to discuss the year-end renewals. The industry has been grappling with a number of pressures that have caused this challenge, including annual unexpected cat losses that caused capacity to retreat, unrealised investment losses further hitting the availability of capacity, and longer-term worries on climate change.

The situation has been exacerbated by inflation, which has increased the value of the assets being insured and reinsured. This has triggered additional demand for reinsurance coverage—as much as €3 billion more in Germany alone—just at a time when reinsurance capacity is constrained.

All this leads to concerns over the volatility of results, which featured highly in the survey. That has been a theme of recent years, partly driven by secondary perils that have triggered much higher-than-expected losses for the sector.