Reinsurers are unlikely to shift ground on the share of high-frequency natural catastrophe risks they are willing to pick up, according to Swiss Re executive Urs Baertschi.

“Right now, there is a reasonable balance in that risk sharing and we expect that the industry maintains that discipline,” the property and casualty reinsurance CEO said at the Reinsurance Rendezvous in Monte Carlo when asked about pressure to cover more attritional losses in upcoming renewals.

Mr Baertschi says, traditionally, primary insurers pick up smaller, more frequent events, leaving reinsurers to act as shock absorbers for large-scale disasters, and the current balance is “about what you would expect”.

“It ebbs and flows a little bit. We also know how it really did not work a few years ago and then the industry had to react pretty significantly, and that is not overall healthy.”

Swiss Re reports that global insured losses last year totalled $US135 billion ($203 billion) without a major insurance loss such as Hurricane Katrina in 2005, which if adjusted for today could cost at least $US100 billion ($150 billion). 

Mr Baertschi says it is possible losses could rise to $US200 billion ($301 billion) “or even” $US300 billion ($451 billion) in certain scenarios where large-scale catastrophes occur.

Swiss Re says long-tail classes in the US, such as liability, remain a concerning area, while favourable areas include specialty and property, with prices “adjusting to the competitive market environment”.

A rise in civil commotions, unrest and riots is being monitored for insurance implications, Mr Baertschi says.

“This is something that we are seeing on the rise globally and it is a concern and something we are paying attention to.”

Hannover Re anticipates stable or slightly lower prices overall in its P&C business at January renewals, while terms and conditions and retentions are also likely to be unchanged.

“We are staying focused, writing only business that meets our profitability requirements. If these are not met, we are also willing to refrain from accepting business in the interests of active cycle management,” executive board member Sven Althoff said.

“On the whole, though, we continue to see good opportunities for profitable growth together with our clients.”