Hannover Re’s German subsidiary, E+S Rückversicherung AG, has predicted continued demand for reinsurance and feels that despite trends showing a softening market emerging in property and casualty (P&C) reinsurance, a stable market environment in Germany is likely for 2026.
The company also highlighted the softening price trend in the property line in industrial business and, overall, describes the current environment as one shaped by consolidation and stable claims experience.
For its upcoming January 1, 2026, renewals, the firm anticipates continued growth overall in a stable market environment, despite signs of softening in the P&C market.
“Our clients know: We are always at their side as a reliable and consistent partner – even when the market environment is challenging. Our strong and enduring business relationships coupled with our robust capital base will enable us to generate further profitable growth – together with our clients. Thanks to our business model as a pure-play reinsurer, we offer the entire spectrum of reinsurance coverage and are keen to explore innovative reinsurance concepts, including for example structured solutions for capital management,” said Thorsten Steinmann, Chief Executive Officer of E+S Rück.
The reinsurer notes that demand for high-quality reinsurance enabled it to further expand its premium volume, and after heavy losses in recent years, expenditures due to natural catastrophes have so far remained moderate, while motor insurance has experienced a significant recovery.
However, geopolitical uncertainties, extreme weather events caused by climate change and claims inflation continue to create challenges for the German insurance sector. As such, E+S Rück says that it is “crucial” that “prices as well as terms and conditions adequately reflect the risks in order to offer stable reinsurance protection over the long term.”
On the motor line of business, Steinmann said: “German motor insurers are well on track to reclaim their profitability. But this does not mean that the journey towards a sustained return to the black is over. Claims inflation is still clearly outpacing the general rate of inflation, notably driven by further increases in spare parts and workshop costs in motor own damage business. On the motor liability side, expenditures associated with major bodily injury claims are rising, in part due to higher treatment and care costs. Against this backdrop, further targeted rate increases are necessary in motor business because insurers must price in these higher costs.”
Looking ahead, the reinsurer expects its natural catastrophe business to see a continued increase in demand overall for covers, and highlights that prudent underwriting and risk-adequate prices remain indispensable, regardless of the claims experience over the remainder of the financial year.
In industrial and commercial business, which as mentioned above is showing a softening price trend in property, the firm explains that the number of large fire losses is down year-on-year, while claims expenditure due to natural perils is significantly below average, which both have positive implications for profitability.
However, “specialty lines of marine and aviation are currently feeling the effects of geopolitical events and tensions combined with existing surplus capacity,” warns the firm, with conditions expected to remain broadly unchanged.
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