Prices for natural-disaster coverage in Europe will probably remain unchanged in the January round of renewals even as events increase, the head of Allianz SE’s reinsurance unit said.
“Rates should stay stable in January,” Clemens von Weichs, head of Allianz Re, said in an interview in Baden-Baden, Germany. “While we continue to see a rise in the number of events, this hasn’t had an effect on the overall market.”
The unit provides reinsurance coverage for Munich-based Allianz, including risks related to natural catastrophes. It places the rest with other reinsurers such as Munich Re or Swiss Reinsurance Co. Allianz Re is “open to write more third-party business” to cover other insurers, but will do so “cautiously and with a focus on long-term relationships,” von Weichs said.
Coverage for European windstorms, which may lead to the most expensive claims for insurers and reinsurers in the region, isn’t currently seeing a great change in demand, he said. “Typically, the demand is coming after a large event rather than before,” according to von Weichs.
European insurers have to be able to manage a regional windstorm that could cause 36.7 billion euros ($51 billion) in insured losses under new risk-based regulation, Perils AG, a catastrophe-loss data provider, said earlier this week. That compares with the most expensive storm for the industry in Europe on record, winter storm Lothar, which caused about $5.9 billion in insured losses in 1999.
“We have no doubt that a windstorm causing claims of as much as 40 billion euros is a realistic scenario,” von Weichs said. “One has to take into account the rise in values and repair costs.”