At year-end 2025, Stephan Wirz, Chief Business Officer and Member of the Board of Management at Prague headquartered reinsurer VIG Re, said the biggest challenge the re/insurance market faces is “to retain the credibility of our industry” and demonstrate to investors that “it can deliver risk-appropriate returns over time.”
“Re/insurance is needed to protect the investments of investors and therefore one of the enablers for economic growth,” said Wirz.
He added, “Looking at the consolidated ROE of the insurance and reinsurance industry, we can see that the ROE of reinsurers is only marginally higher than the one of primary insurers. It is highly questionable whether this marginal difference is sufficient to cope with the volatility that reinsurers take of the balance sheet of insurers.”
Regarding opportunities the reinsurance market faces at year-end 2025, Wirz said he sees a structural shift towards a growing importance of reinsurance amid developments around climate change and emerging risks.
“Hence, we believe we have good arguments to convince primary insurers and the society that there is a price for taking risk and that there must be an agreement what is a fair price to take those risks,” said Wirz. “It is also an opportunity to align with partners who share a common definition of what is a sustainable and mutually beneficial partnership.”
On the topic of the upcoming January 1st, 2026, reinsurance renewals, he noted that the outlook varies by market.
“Markets or companies that have experienced adverse results tend to renew with minor risk adjusted rate reductions whereas markets that have provided relatively good results and have invested in improving terms and conditions on the primary business tend to benefit of higher risk adjusted rate reductions even in cases where more Nat Cat capacity is required,” Wirz explained.
When heading into a softer market for natural catastrophe business, Wirz emphasised that underwriting discipline will be key, with a focus on partnerships that share a long-term view of value and support clients across their portfolios.
He stated, “We continue to deploy Nat Cat capacity, preferably where we collaborate in long-term mutual partnerships or where we see very attractive risk-return profiles.
“In non-Nat Cat lines, however, we see a more differentiated market picture. For property risk and main casualty lines, we so far see stable and risk adequate price developments.”
Looking ahead to the outlook for 2026, Wirz emphasised that the world is uncertain and that the market’s direction will depend on the level of natural catastrophe activity, other large losses, and the development of geopolitical tensions during the year.
“Should we experience another year of benign Nat Cat activities it is very likely that the Nat Cat market will soften further. In that case underwriting discipline, strong partnership management, transparent data analytics, broad-based support but also strict Nat Cat capacity steering will remain of utmost importance,” Wirz concluded.
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