Insurers Adjust Treaty Terms Amid Rising Secondary Perils
Reinsurers are modifying capacity structures following significant losses from localized weather events and fires.
Updated on Oct. 20, 2026 in Severe Weather
Live Poll
Do you expect your home or business insurance premiums to rise due to increased local weather risks?
Insurers are adjusting their reinsurance treaty capacities to account for increased losses from secondary perils like hail and floods. These shifts respond to changing loss patterns that have challenged historical assumptions regarding severity.
Why it matters
Recent localized weather events and individual fires have produced significant insured losses that traditional models may not fully capture. Consequently, reinsurers are prioritizing stricter underwriting and data quality over increased capacity.
A recent hail event in Switzerland resulted in estimated market losses of approximately $1.2 billion, or CHF1 billion. Losses in Switzerland and Austria have been driven by secondary perils over the past two years.
The players
VIG Re
This company is a reinsurer that manages underwriting operations for clients across the Nordic countries, Switzerland, and Austria.
The details
Underwriters are placing a greater emphasis on exposure management and portfolio understanding to address convective storms and flooding. VIG Re is actively managing this process for its operations across the Nordic countries, Switzerland, and Austria.
Timeline
July 2026: A large fire loss occurred in Krokstadelva, Norway.
Past two years: Switzerland and Austria saw significant losses from secondary perils.
Upcoming: Reinsurance treaty renewals will reflect updated pricing and terms.
Seasonal Patterns
The industry is moving away from the traditional reinsurance loss frequency models by implementing more granular exposure management. This marks a departure from legacy systems, as insurers now integrate real-time risk data to counter the rising frequency of localized weather losses.
Property owners and businesses in high-risk regions should review their current insurance policies to understand potential changes in coverage terms. Preparing for more rigorous underwriting requirements may involve improving site-specific data and disaster mitigation measures.
The takeaway
The insurance industry is pivoting toward more disciplined underwriting and precise risk modeling to combat the unpredictability of secondary weather perils. Stakeholders should expect more detailed data requests and potential restructuring of treaty agreements during upcoming renewal cycles.
Further reading
For more information on the impact of changing weather patterns on global insurance markets, visit Severe Weather.
Live Poll
Do you expect your home or business insurance premiums to rise due to increased local weather risks?
