Europe faces escalating climate risks
The frequency and severity of weather-related natural catastrophes are increasing – and Europe is no exception, Munich Re has announced.
The year 2023, with its extreme heat, has continued this trend, and provides some further evidence that climate change is already aggravating weather-related risks. Munich Re also said that demand for cyber risk coverage is high.
Through September Europe saw extreme weather events including heavy rainfall, flooding, flash floods and severe hailstorms, producing overall claims expenditures that were once again a major burden for insurers, the reinsurer said.
Individual insured market losses per event more often cross the 1 billion euro mark per event. According to a Munich Re analysis from late September 2023, at least seven natural catastrophes in Europe fall into this category (2022 saw five and 2021 saw four):
- Earthquakes in Turkey and Syria in February
- Flooding in northeast Italy and adjacent countries in May
- Storms Kai and Lambert in Germany in June
- Severe weather due to Storm Unai in northern Italy, Slovenia and Croatia in July
- Flooding in Slovenia, Austria and Croatia in early August
- Storm Hans in northern Europe in August
- Storm Denis with hail, especially in southern Germany, in late August
In addition Munich Re said that demand for cyber risk coverage remains high. It estimates that the premium volume in Europe, the second-largest cyber insurance market after North America, amounts to $2.3 billon (as of the end of 2022). Munich Re’s cyber team expects a total market volume of around $8 billion by 2027 with an annual growth rate of 31%.
However, Claudia Hasse, head of cyber for Europe and Latin America and chief executive manager (Non-Life) at Munich Re Germany, said that she had not noticed any change in terms of the trend of captive formations due to companies deciding to self-insure, or captive closures, as the result of recent events.