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Swiss Re sees demand for reinsurance rise amid natural disasters

Swiss re
Demand for reinsurance is rising amid more natural disasters, wars and economic instability Keystone-SDA

Swiss insurance group Swiss Re anticipates an increase in demand for reinsurance coverage, in the face of growing risks posed by natural disasters, macroeconomic instability and political tensions.

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“Risks have increased, and so has demand,” stressed Urs Baertschi, CEO of the Zurich-based group’s property-casualty reinsurance business, quoted in a press release on Monday. Reinsurance therefore remains “a natural choice” for insurers to “protect themselves from excessive losses”, he added.

Among the drivers of demand are rising property values, urbanisation and inflation-induced cost increases, as well as more frequent natural disasters. The year 2023 was the fourth consecutive year in which insured damage costs exceeded $100 billion (CHF85 billion) worldwide.

And 2024 is unlikely to escape this trend, with insurance losses costing some $60 billion in the first half of the year alone, an amount 62% higher than the ten-year average, warned the world’s number two reinsurer.

+ Swiss storm damage to exceed CHF200 million

Particular fields, notably engineering and cyberspace, are also experiencing growing demand, driven respectively by renewable energies and cyber attacks.

In the US, the trend towards compensation lawsuits is weighing on the industry. In 2023, US courts awarded damages in excess of $100 million in 27 cases, Swiss Re reported on the sidelines of the industry’s annual meeting in Monte Carlo.

Translated from French by DeepL/jdp

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