Everest’s Klinger: Climate change and inflation to drive reinsurance demand
Everest’s head of international reinsurance Artur Klinger spoke to The Insurer TV ahead of the Guy Carpenter Baden-Baden Reinsurance Symposium taking place on Sunday 22 October 2023 at the Kongresshaus Baden-Baden.
To describe the year for reinsurers, Klinger looked to the past. After 2008, interest rates dipped to historic lows. However, this changed after the tmpact of Covid-19 in 2020, as well as escalating climate and world events, such as the floods in Germany in 2021, along with unprecedented wildfires in 2022 and of course, the hail loss event in France.
“I think there was a bit of a wake-up call in 2022 for the European markets,” said Klinger.
“And in the last renewal, Europe was in a big catch-up to really increase prices, but much more importantly, after the many years of no inflation, we also addressed structures so that they fit now to increased inflation, but also to climate change.”
In turbulent times, Klinger sees several key factors that will continue to drive risk and reinsurance demand in 2024 – and these are very similar to what we’ve seen in the last couple of years with climate change and more hail and flood risk being among them.
The other vital component is core inflation. And he predicts that there will continue to be more appetite for reinsurance as global risk intensifies.
“We believe the [hardening] market will continue, probably even to 2025,” said Klinger.
But the best product a business can have against global uncertainty, remains reinsurance, according to Klinger. And Everest’s recent capital raise will help the firm to respond with more flexibility to clients demands.
“Reinsurance is probably the best product to cover our clients against uncertainty… and I also haven't seen a lot of really good quality capacity coming into the market. So I think there is no reason why we see a softening of the market. So I think the hardening will continue,” said Klinger.
Watch the 10-minute interview with Everest’s Artur Klinger to hear more on:
- Everest’s approach for the 1.1.2024 renewals
- Everest’s predictions for the (re)insurance industry
- Conditions that will contribute to another hard market in 2024 and beyond