Risks becoming more global and volatile, value of reinsurance never more evident: Munich Re

Munich Re, one of the world’s largest reinsurance companies, has underscored that the value of reinsurance has never been more evident than it is today, as risks continue to become more global and volatile.

At the 2026 Monte Carlo at the Rendez-vous event, Munich Re described reinsurance as society’s immune system, but cautioned that the industry is facing an abundance of uncertainties from the changing climate, geopolitical tensions, and rapid technological development.

Munich Re importantly highlighted that insurance industry losses from non-peak perils exceeded $100 billion for the first time in 2025, as global insured losses surpassed $100 billion for the sixth consecutive year.

In conjunction with losses from non-peak perils such as wildfires, floods and severe convective storms, Munich Re notes the rise of heat as a driver of claims, which the firm describes as a “more insidious risk.”

“The consequences of heatwaves have claimed a growing number of lives in recent months. Furthermore, exceptionally high temperatures, as well as floods and other non-peak perils, are having a significant impact on infrastructure and, consequently, on supply chains. They also cause considerable damage to agriculture, healthcare systems, and to buildings and technical installations,” Munich Re said.

“Consequently, such natural hazards are shifting more and more from being primarily ecological risks to economic risks, even though it is not always easy to establish a causal link in the case of heat-related damage,” the company continued.

Moreover, the January 2025 California wildfires resulted in the highest economic loss ever recorded for the peril, amounting to an astonishing $54 billion. Additionally, Europe was also heavily impacted by fires too.

“In the current situation, reinsurers play a key role in helping better understand and assess changing risks. Furthermore, they can help with prevention and resilience, and cushion claims burdens. They thus make a pivotal contribution to economic stability and to the insurability of new and existing risks,” Munich Re explained.

Thomas Blunck, Member of the Board of Management, Munich Re, commented: “The value of reinsurance has never been more evident than it is today. A resilient reinsurance sector is capable of absorbing increasingly complex and globally interconnected risks.”

Blunck continued: “Offering reliable capacity underpinned by our exceptional financial strength, outstanding expertise and innovative solutions, we create stability, facilitate investment and support recovery following major loss events. These criteria are crucial to long-term economic resilience and the insurability of risks.”

Stefan Golling, Member of the Board of Management, Munich Re, said: “Volatility is not a temporary phenomenon. Our mission is to pool our expertise, capacity and innovative strength to help our clients remain resilient, adapt successfully to change and navigate the new risk landscape with confidence. And regardless of market cycles, this remains true: we are there for our clients – especially when they need us most.”