Growing reinsurance capacity, supported by the industry's healthy capitalization, has increased competitive pressure and contributed to declining prices during the 2026 renewal rounds. However, Hannover Re stressed that the market remains differentiated, with stronger competition particularly visible in NatCat covers and loss-free business. Long-term loss drivers, including climate change, inflation, earthquakes and growing concentrations of insured values in exposed regions, remain unchanged.
For the January renewals, Hannover Re plans to offer at least stable capacity, provided adequate pricing can be achieved.
“We grow where prices are commensurate with the risks and relinquish business that does not meet our profitability requirements,” said Sven Althoff, Executive Board member for Hannover Re's property and casualty reinsurance.
Demand remains particularly strong in areas such as cyber, structured reinsurance and natural catastrophe covers, while regulatory changes, technological developments and economic growth in emerging markets are creating additional opportunities.
CEE and SEE: prices largely stabilized at risk-adequate levels
In Central, Eastern and Southeastern Europe, 2026 has so far been relatively uneventful in terms of losses, although several notable individual losses occurred at refineries and industrial facilities.
Across the region, including Türkiye, Hannover Re said reinsurance prices in most business lines have stabilized at levels commensurate with the underlying risks.
Climate-related exposures are nevertheless becoming increasingly visible, with heatwaves, hailstorms, heavy rainfall and tornadoes causing more frequent losses. According to Hannover Re, pricing developments during the upcoming renewal season will therefore depend significantly on loss experience in the second half of 2026 and on inflation expectations.
In Europe overall, prices and terms and conditions have remained broadly stable. However, loss-free programs could face further price reductions amid low claims activity and strong capitalization across the insurance and reinsurance sectors. Higher inflation expectations and increasing frequency losses should limit the extent of this downward pressure.
NatCat demand remains on a long-term growth path
Hannover Re expects demand for natural catastrophe reinsurance to continue growing over the longer term, driven by climate change, increasing concentrations of values in exposed areas, inflation and the persistent protection gap.
While NatCat prices have fallen from their 2023–2024 peaks, Hannover Re considers them technically risk-adequate. The reinsurer is prepared to provide additional capacity where adequate prices and conditions can be maintained.
Overall, Hannover Re expects the January 2027 renewals to bring greater differentiation between clients, portfolios and loss experience, as increasing capacity and competition put pressure on pricing while the underlying risk environment remains challenging.
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