According to a report released on Tuesday by broker Gallagher Re, some European property reinsurance rates increased by more than 50% at January 1 renewals after the region experienced record insured losses from natural disasters such as floods and storms last year.
Reinsurers insure insurers, and increases in reinsurance rates are frequently passed on to insurer customers.
Flooding in Germany and other countries such as Austria, Belgium, and Switzerland in July resulted in insured losses totaling more than 12 billion euros ($13.55 billion), according to Gallagher Re in a report on renewals on one of the most important dates in the reinsurance calendar.
Last year, Europe was also hit by heavy hail and other storms.
In natural disaster-affected areas, reinsurance rates in Germany increased by 15% to more than 50%, mirroring increases in Europe as a whole. In Switzerland, such rates ranged from 20% to more than 50%.
“Reinsurers have managed to achieve further price improvements to build on the increases of the previous 18 months,” said James Kent, global CEO of Gallagher Re.
According to Gallagher Re, some reinsurers have reduced their exposure to the region.
In the United States, which experienced a major winter storm as well as wildfires, hurricanes, and tornadoes last year, disaster-hit areas saw rates rise by 10-25 percent.
Natural disasters resulted in $105 billion in global insured losses last year, the fourth highest on record, according to Swiss Re.
Global property catastrophe reinsurance rates rose 10.8 percent on average this year, according to a separate report released this week by reinsurance broker Guy Carpenter.