After the annual industry meeting in Monte Carlo, Munich Re continues to see the global reinsurance market in a stable but challenging environment. Demand remains high, and the market is in a "sensible balance," said Thomas Blunck, a board member of the reinsurance giant. In this context, geopolitical and economic risks, as well as claims inflation, remain of central importance.

Despite declining overall inflation, claims inflation remains a driving force in key segments. Blunck emphasized that factors such as rising compensation verdicts in the USA ("social inflation"), higher care costs, and more expensive building materials are driving up claims costs, increasingly worrying reinsurers.

In the global reinsurance market, an inflation-adjusted growth of 2 to 3 percent is expected for the next three years, which is almost on par with the primary insurance sector. Blunck predicts somewhat stronger growth in the Asia-Pacific and Latin America regions, while Europe and North America might lag behind.

The global reinsurance capital increased as expected to USD 515 billion in 2024. The demand for reinsurance capacity remains strong, stabilizing the balance at a higher level. "Adequate returns are crucial," emphasized Blunck, especially given the increasing volatilities and growing risk exposure.

In addition to natural disasters and climate change, Blunck also cites accident insurance and the cyber sector as particularly high-risk segments that require disciplined approaches and sound risk management.