Lars Nelson, Managing Director and Head of the German branch, and Björn Hagendorff, Managing Director and Head of Regional Clients, Germany, discussed recent changes in buyer confidence within the German reinsurance market. They spoke with The Insurer about how the market is shifting from a hard phase to one with more available capacity and moderate rate reductions as of January 1, 2025.
Nelson stated: “We expect clients to act with greater confidence as buyer-friendly conditions emerge. Their focus is on addressing pain points […] Our role is to support clients with creative solutions to bridge the gap between their desire for lower retentions or better frequency protection, and reinsurers’ insistence on maintaining stable retentions, typically aligned with a 1-in-7-year loss event as the entry point for NatCat programmes.”
The executives noted that over the course of the year, buyer confidence has increased. This trend has led to more competitive renewal pricing and could result in potential double-digit rate reductions for loss-free natural catastrophe (NatCat) business at January 1, 2026.
As market conditions become more favorable for buyers, Nelson and Hagendorff emphasized: “the key will be to find common ground and avoid overcorrection on either side.” They stressed that reinsurance is a long-term relationship business requiring balance between cedants and reinsurers. These principles are also highlighted in Howden Re’s recent "Who Dares Wins" publication, which calls for greater alignment, cooperation, and innovation across the industry.
Looking forward, Nelson and Hagendorff pointed out that introducing mandatory natural catastrophe insurance could represent a significant structural change. Such a move could “substantially increase NatCat capacity purchases” and create new opportunities for both insurers and reinsurers.