Germany’s insurance industry has put forward a national catastrophe reinsurance proposal, Elementar Re, designed to act as a backstop for extreme natural disaster losses while keeping cover available in high-risk areas.
The German Insurance Association said Elementar Re would pool the country’s most exposed residential buildings and provide long-term protection against floods, storms, and other climate-driven events.
The goal, according to the association, is nationwide cover that stays affordable without destabilising insurers or shifting the burden entirely onto the state.
Climate losses already shape the debate. Jörg Asmussen, chief executive of the association, said climate-related damage in Germany has risen fivefold since 1980.
He said the industry wants a system that remains fair for homeowners, stable for insurers, and sustainable for public finances. Insurance alone, he added, can’t carry that weight without stronger prevention.
The proposal targets a clear pressure point. More than 400,000 residential buildings sit in zones where pure risk-based pricing would push premiums beyond what many owners can pay.
Elementar Re would absorb those risks into a shared pool, allowing insurers to continue offering cover even where exposure runs high.
Primary insurers could transfer policies for high-risk properties into the scheme. Premiums would be capped and scaled by building size. Any gap between capped premiums and actual risk costs would be covered through a small adjustment spread broadly across the system.
Anja Käfer-Rohrbach, deputy chief executive of the association, said the structure keeps even the most exposed homes insurable through collective financing, without warping competition. The intent is solidarity, not subsidy shopping.
Elementar Re sits behind the private market, not in front of it. The association described it as a government-backed stop-loss of last resort.
Claims would first draw on private reinsurance and a reserve fund built up over time. Only in rare, severe events would a state mechanism step in, once private buffers are largely depleted.
The state’s role stays limited. It wouldn’t act as a primary insurer or a standing reinsurer. Support would trigger only for exceptional catastrophes with losses above €30 bn, a threshold meant to capture truly systemic events.
The proposal includes an opt-out. Property owners who decline participation would also waive any claim on state aid after a disaster.
Insurers argue that this approach lifts overall insurance uptake while preserving contractual freedom, sidestepping the drawbacks of compulsory cover.
The association framed Elementar Re as a starting point rather than a finished policy. It’s meant to push political and public discussion on how Germany handles growing catastrophe risk as climate patterns shift and losses compound.
According to Beinsure, the scheme reflects a wider European rethink, where markets try to stay functional even as extremes test their limits.
