- Munich Re expects the global reinsurance marke to grow 2-3% over the next three years, with high demand for reinsurance capacity.
- Munich Re aims to maintain risk-adequate rates and conditions, leveraging its financial strength and expertise.
Sun Sep 08 11:00:34 -0000 2024 UTC– Munich Re sees the market environment for reinsurers “promising and challenging at the same time”, the company said at the “Rendez-Vous de Septembre” industry event in Monte Carlo.
Following pronounced growth in recent years, Munich Re sees the global reinsurance market growing by inflation-adjusted 2–3% over three years. Growth may prove to be “slightly stronger in Asia-Pacific and Latin America, and slightly weaker in Europe and North America”, according to Munich Re’s baseline scenario.
Economic Stability with Persistent Geopolitical Risks
Although the macroeconomic environment has stabilized, significant geopolitical risks remain. Global economic growth is projected to remain slightly above 2.5% annually, lower than pre-pandemic levels. Inflation in advanced economies is declining but will likely stay higher than in the previous decade.
Claims Inflation Exceeds Economic Trends
Claims inflation in several reinsurance segments is rising more rapidly than general inflation. Factors such as social inflation in the U.S., increasing medical and care costs, and shortages in construction materials and skilled labor are driving higher claims costs.
Reinsurance Capacity on the Rise
Global reinsurance capital has grown to an estimated $515 billion in 2024, with strong demand for reinsurance capacity helping stabilize the market. The market for alternative risk capital has seen slight growth, though it has not significantly impacted the broader reinsurance landscape.