Page 18 - The Insurance Times September 2025

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cybersecurity costs. The reorganization
Hedge Funds’ Expansion Jeopardises Catastrophe
reflects Munich Re’s broader commit-
Insurance Stability, Warns Munich Re ment to safeguarding its digital assets
Munich Re, one of the world’s oldest and largest reinsurers, has raised alarms amid increasing global cyber threats in
over the growing influence of hedge funds and private investors in the ca- the insurance and reinsurance sectors.
tastrophe insurance market. A board director cautioned that while this in-
flux of alternative capital—amounting to $115 billion by end-2024—helps Swiss Re Urges Stronger
meet rising global insurer demand, it may undermine market stability.
Global Collaboration to
These new entrants often lack the deep risk management capabilities of Tackle Escalating NatCat
traditional reinsurers and tend to favour covering rare, high-impact events
such as major hurricanes, ignoring more frequent perils like hailstorms. Losses

The concern is that after a major catastrophe, private investors may with- Swiss Re's Urs Baertschi, CEO of Rein-
draw capital abruptly, disrupting coverage and triggering sharp premium surance EMEA, has called for stronger
increases. Munich Re defends its more disciplined underwriting approach, international collaboration among in-
emphasizing that robust pricing and retention structures are vital to pre- surers, governments, and private sec-
serve insurance solvency and market predictability. tors to address the growing challenge
of natural catastrophe (NatCat) losses.
Speaking at a recent industry forum,
Munich Re Unifies Global nel and operations across 19 countries Baertschi highlighted that climate
under a unified team headquartered in change-driven events such as floods,
Security Teams to
Germany, Munich Re aims to increase storms, and wildfires are becoming
Strengthen Cyber Resil- responsiveness to emerging threats, more frequent and severe, causing
ience streamline governance, and ensure mounting economic and insured losses
consistent application of cybersecurity globally.
Munich Re has consolidated its global
cyber and information security func- protocols. The company also seeks to He emphasized the need for better risk
tions under a single leadership struc- minimize third-party risk through mitigation strategies, advanced mod-
tighter vendor controls and improved eling, and public-private partnerships
ture to enhance operational resilience
and reduce costs. The move aligns with visibility into security postures across its to improve resilience. Swiss Re’s inter-
the company’s “Ambition 2025” strat- ecosystem. nal research shows that the protection
egy, which emphasizes digitization, This centralization is expected to opti- gap in NatCat insurance remains high,
customer-centric innovation, and risk mize resource allocation and speed up especially in emerging economies.
prevention. incident response times, while reduc- Baertschi stressed that insurers cannot
By bringing together security person- ing duplication of efforts and handle the growing burden alone and

The Insurance Times September 2025 17