German insurers propose Elementar Re safeguard system for nat cats
The German Insurance Association (GDV) has unveiled a framework to ensure that protection against natural catastrophes remains widely available, affordable, and sustainable over the long term, centred on a new reinsurance vehicle called Elementar Re.
With the Elementar Re model, the GDV said insurers are presenting a “concrete proposal” for how a nationwide safeguard system in Germany could be structured.
Elementar Re reportedly relies on two private safeguards in the event of a claim, including its own reinsurance and a gradually built-up reserve fund.
A state stop-loss mechanism only kicks in in extreme events when private reserves are nearly depleted. The state thus acts as a backstop, not a primary insurer, providing a targeted safety net for catastrophes exceeding €30 billion, in line with the coalition’s market-complementing reinsurance approach.
The model is designed to operate within a broader natural catastrophe framework, where coverage becomes the default for new policies and a one-time switch for existing ones, both with an opt-out that also waives state aid.
According to the GDV, its effectiveness will depend on strong prevention measures, mandatory risk assessments, binding building rules in hazard zones, and full transparency of local risks, ensuring sustainable insurance, early risk management, and effective limitation of potential damages.
Jörg Asmussen, CEO of the GDV, said, “Climate-related damages in Germany have increased fivefold since 1980. Our goal is a safeguard system that works permanently: fair for homeowners, stable for the market, and sustainable for the public sector. With Elementar Re, we are introducing a key building block for this system.
“But it is also clear: insurance alone is not enough. Without consistent prevention, risks will continue to rise — and that threatens the entire system.”
According to the GDV, more than 400,000 residential buildings in Germany are in areas where risk-based premiums would be difficult to afford.
“Elementar Re pools these high-risk buildings, enabling continued insurance coverage even in challenging risk situations,” the association explained.
The GDV added, “Primary insurers can transfer policies for these houses to Elementar Re. Premiums will be capped at a maximum level, scaled according to building size. The difference can be financed through a small, broadly distributed adjustment.”
Anja Käfer-Rohrbach, Deputy CEO of GDV, said, “With Elementar Re, we keep even the most exposed houses insurable and affordable — financed in solidarity, without distorting the market.”
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