Natural disasters do not go beyond Hannover Re’s budget

Dhe series of natural disasters in the past few weeks has not upset Hannover Re. Despite the flood disaster in western Germany, the hurricane “Ida” in the USA and the unrest in South Africa, the world’s third largest reinsurer will be within the scope of its major loss budget for the current year at the end of the third quarter, Board member Sven Althoff said in a conference call on Monday. According to earlier information, the budget for 2021 is 1.1 billion euros, of which 326 million euros had been used up by the end of June. With this, Hannover Re could also achieve its goal of a profit of 1.15 to 1.25 billion euros this year, said Althoff.

In view of the numerous loss-making natural catastrophes, Hannover Re expects rising prices and improved conditions in the talks that are currently beginning about the renewal of the contracts at the turn of the year. But it is still too early to quantify the rate of increase, said board member Michael Pickel. Only with further price increases in property and casualty reinsurance could reinsurers offer reliable risk protection in an increasingly challenging environment, said CEO Jean-Jacques Henchoz, according to a statement in Hanover on Monday. With the upcoming contract renewals with primary insurers such as Allianz and Axa, he expects a rise in prices, especially in the regions affected by the damage.

According to an estimate by Hannover Re, the destruction caused by the flood disaster in Germany and neighboring countries is likely to cost the insurance industry at least 7.5 billion euros. The Management Board therefore expects a significant adjustment of the conditions in this country. Hannover Re also expects further price increases in cyber insurance against the increasing number of attacks on computer systems.

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