Insurance markets face rising climate and cyber risks

The insurance and reinsurance sectors are facing increasing pressure from climate change, cyber threats, and rising operational costs. Munich Re reports that insured losses from natural disasters in Europe have grown by an average of 5% annually since 1980, with the rate accelerating in the last decade. The company emphasizes that traditional reinsurance remains a vital source of capital protection for insurers, noting that the ratio of traditional to alternative capital is expected to rise from 3.5 in 2017 to nearly 4 by 2026.

In the municipal sector, companies involved in waste management, recycling, and energy are being classified as high-risk, particularly regarding fire hazards. Experts from SALTUS Towarzystwo Ubezpieczeń Wzajemnych note that climate change and the energy transition are significantly impacting local government insurance markets. Additionally, inflation in claim costs is outpacing premium growth; for instance, in the German market, spare part prices rose by 6.1% annually between 2017 and 2025, while average premiums only increased by 2.2% per year.