E+S Rückversicherung AG, the Hannover Re subsidiary responsible for the Group's German business, anticipates further price increases and improved terms and conditions in the 1 January 2025 renewals in property and casualty reinsurance after losses caused by severe weather events, Hannover Re said in its press release.

Key takeaways of the report include:

• Flood catastrophes cause further significant losses
• Claims expenditure in motor insurance continues to rise significantly
• Increased capacity sought for high-quality reinsurance protection, especially for natural catastrophe covers
• Demand for cyber covers remains strong

E+S Rück expects that motor insurance, the largest line of property and casualty insurance by volume, will likely remain in deficit. The tariff adjustments made by primary insurers have so far failed to achieve the desired effect owing to persistently high claims inflation. Sharp increases in the costs of repairs and spare parts have led to a further rise overall in claims expenditure for physical damage. Higher costs can be observed in connection with major bodily injury claims due to increased care expenses.

As for natural catastrophe covers, the claims trend seen in prior years has been sustained. Following the hail events of 2023, the claims picture for insurers in the current financial year has been especially notable for multiple flood events. 2024 is again expected to see considerable losses from natural disasters. For the coming year, E+S Rück anticipates growing demand overall for natural catastrophe covers, combined with a sharp increase in purchased capacities, while at the same time prices and terms and conditions will show further risk-adjusted improvements.

After an increased frequency of large fire losses in 2023, industrial and commercial business is reporting continued poor market numbers in property insurance for 2024 as well. Adjustments are still needed even though inflation has normalised. The focus is increasingly turning to new exposures such as SRCC risks. Emerging risks, including for example the insurability of forever chemicals (PFAS), are growing in significance in the liability line.

The market for cyber covers had already levelled off in 2023 due to softening prices and increased competition. At the same time, there is pressure to make adjustments as losses caused by cyber-attacks are rising. The aggregation risk is also taking on added relevance. Reflecting the advance of digitalisation, cyber insurance is a growing line of business that requires the appropriate expertise, the report said.

"For a number of years now, the insurance industry in Germany has been faced with numerous natural catastrophes causing considerable losses and damage. Once again, this year, we have already seen devastating floods, following extraordinary severe weather events of previous years with hail and heavy rain, as well as flash floods and winter storms. At the same time, motor insurance remains in deficit for structural reasons. We are also concerned about increased loss advices from our clients for prior-year claims. As a reliable partner for our clients, we always offer them the best possible reinsurance capacities and support them actively in managing claims. Adequate prices, terms and conditions are absolutely essential for this", emphasized Michael Pickel, Chief Executive Officer of E+S Rück.