Climate change, geopolitical tensions and rapid technological development are increasingly interacting and reshaping the global risk landscape.
Natural catastrophes remain a major risk driver, with Munich Re pointing in particular to the growing significance of so-called non-peak perils. In 2025, insured losses from such events exceeded USD 100 billion for the first time, reaching USD 104 billion. Overall global insured losses surpassed USD 100 billion for the sixth consecutive year.
Events once considered relatively moderate, such as hailstorms, floods and wildfires, are increasingly generating aggregate losses comparable with those historically associated with major catastrophes. Heat is also becoming a growing source of human and economic losses, affecting infrastructure, supply chains, agriculture, healthcare systems and buildings.
The 2025 California wildfires alone generated an economic loss of USD 54 billion, the highest ever recorded for this type of event. Europe has also experienced significant wildfire activity, including fires close to major urban areas.
At the same time, cyber threats and artificial intelligence are creating new challenges for risk management and insurance. According to Munich Re, 89% of companies surveyed say they do not feel adequately protected against cyber risks. Increasingly sophisticated attacks, AI, geopolitical tensions and systemic interdependencies are adding further complexity and potentially increasing the cost of cybercrime.
While standards for cyber insurance have gradually developed, Munich Re sees the market for AI-related risks as being at an earlier stage. Growing demand for protection will require specialist expertise, appropriate risk models and, importantly, clear contractual wording to determine the scope of coverage.
Against this background, Munich Re emphasized the importance of maintaining a diversified portfolio and consistent cycle management. The reinsurer said it prioritizes portfolio quality and profitability over premium growth when available capital significantly exceeds demand, allowing it to preserve capacity for periods when market conditions become more difficult.
Reinsurance capital has increased by an average of 5.8% annually over the past eight years, underlining the industry's ability to provide reliable capacity through changing market cycles.
“The value of reinsurance has never been more evident than it is today,” said Thomas Blunck, Member of Munich Re's Board of Management, stressing that a resilient reinsurance sector can absorb increasingly complex and interconnected risks while supporting investment and recovery following major loss events.
Munich Re's message in Monte Carlo is that volatility should no longer be regarded as a temporary phenomenon. As the risk landscape evolves, expertise, financial strength, prevention and adequate reinsurance capacity will become increasingly important for maintaining the insurability of both existing and emerging risks.
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