Lars Nelson and Björn Hagendorff discuss shifts in buyer confidence in Intelligent Insurer
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“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.”
At 1.1.2025, the German reinsurance market was at a turning point – transitioning from a hard market to one with adequate capacity and moderate rate reductions.
The Insurer spoke with Lars Nelson, Managing Director, Head of German branch, and Björn Hagendorff, Managing Director, Head of Regional Clients, Germany, about how buyer confidence has been returning over the course of the year, driving more competitive renewal pricing and signalling potential double-digit rate reductions for loss-free NatCat business at 1.1.2026.
As conditions soften, “the key will be to find common ground and avoid overcorrection on either side.” They emphasise that reinsurance is a long-term relationship business built on balance between cedants and reinsurers – principles also reflected in Howden Re’s recent Who Dares Wins publication, which advocates for greater alignment, cooperation, and innovation across the market.
Looking ahead, Lars and Björn highlight the potential introduction of mandatory natural catastrophe insurance as a structural shift that could “substantially increase NatCat capacity purchases” and present significant opportunity for both insurers and reinsurers.