Munich Re Cites Growing Risks, Rising Demand in Reinsurance Market

Munich Re reports that growing climate volatility, geopolitical instability, and evolving cyber threats are intensifying global reinsurance demand, with natural catastrophes and economic uncertainties putting pressure on risk management frameworks. According to Thomas Blunck, member of the board of management, a balanced market environment is expected for the January 2026 renewals, with high demand met by stable capacity.

Natural hazard losses continue to climb, driven by increased frequency and severity of weather events. In the first half of 2025, insured losses from natural disasters reached $80 billion—the second-highest on record for a first half-year—while total economic losses stood at $131 billion. Severe thunderstorms with tornadoes in the United States alone contributed roughly $34 billion to that figure.

Munich Re's data show that since 2020, annual insured losses from natural hazards have regularly exceeded $100 billion. Stefan Golling, board member, said, "Traditional reinsurance capital remains the backbone for the transfer of all kinds of risks." He added that Munich Re's strong capital postion allows the company to retain all risks on its balance sheet, even after a catastrophic event exceeding $100 billion in market losses.

Global inflation, volatile trade tariffs, and macroeconomic uncertainty are also reshaping the risk landscape. Mr. Blunck said that holistic risk management and stable reinsurance capacity are increasingly critical in this environment. "Reinsurance is and will continue to be the decisive protective shield for national economies against major risks."

Despite high losses, the reinsurance sector has maintained strong capital growth. Traditional reinsurance capital has increased by 5.6 percent annually over the past 8 years, though the market has seen little new capital inflow from outside players. Munich Re has responded by expanding natural catastrophe coverage while emphasizing risk-adequate pricing and regularly updating models to reflect shifting climate patterns.

Cyber risk also remains a growing threat. Munich Re expects cyber premiums to double to $30 billion by 2030, despite underinsurance stemming from slow adoption among businesses. The company is working with partners in cybersecurity, technology, and government to create scalable, data-driven solutions.

In the medium term, Munich Re is targeting a diverse, profitable portfolio focused on small and medium-sized enterprises. It is also capitalizing on synergies between its primary, specialty, and reinsurance lines. Innovations developed in primary or specialty insurance—such as solutions for battery storage, geothermal energy, parametric triggers, and artificial intelligence—are increasingly being scaled into reinsurance products.