Dutch Insurer NN Says Extreme Weather May Make Further Premium Hikes Unavoidable

By April Roach | August 30, 2023

Dutch insurer NN Group NV may increase premiums further as extreme weather patterns become more prevalent, Chief Executive Officer David Knibbe said.

While NN benefited from benign weather conditions in the first half of the year, the July storm in the north of the Netherlands will lead to some upward pressure in the second half, Knibbe said in an interview on Tuesday after the company published its first-half earnings report.

“We have a large book and we’re relatively confident that we can deal with these events,” Knibbe said. “Especially also with reinsurance premiums going up, some premium increases as a result of climate change are likely also unavoidable. We try to minimize that also by keeping costs as low as possible.”

Minimizing risk is also key in NN’s modeling, the CEO said.

“We need to become very good at risk selection,” he said. “We need to become especially good at prevention. Even today, if suddenly some emergency is happening or sudden storm is coming up, warning your customers, even if it’s half an hour before the storm, still matters and people can still take measures and prevent more and more claims and more damages.”

NN reported an 11% jump in operating capital generation to €997 million ($1.1 billion) in the first half of 2023 earlier on Tuesday, bolstering its Solvency II ratio to 201% from 197% at the end of last year. The results may increase expectations NN will be able to target further capital returns beyond the current €250 million buyback that’s nearing completion, Bloomberg Intelligence said.

The shares rose as much as 11% [on Aug. 29], the most since March 2020, and were trading up 9.1% at €37.73 as of 12:40 p.m. local time.

Photograph: An aerial view of remnants of floodwaters beneath wind turbines after Tropical Storm Hilary inundated the area on August 22, 2023 in Palm Springs, Calif. (Photo by Mario Tama/Getty Images)

Topics Carriers Pricing Trends

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