Climate change in East Med and Reinsurance The CAN Sigorta Perspective

 

The CAN Sigorta Perspective

 

 

For CAN Sigorta, climate change is not an abstract discussion or a future scenario. It is something we encounter directly in underwriting results, claims behavior, and reinsurance negotiations. In the Mediterranean region, climate change is no longer an exceptional risk. It has become the new operating environment.

 

Insurance companies that continue to treat it as a marginal issue are already falling behind.

 

 

 

 

What We Are Seeing on the Ground

 

 

From our direct field experience, three structural shifts are now undeniable across the Mediterranean:

 

Rainfall is more intense, concentrated, and unpredictable.

Heat stress accelerates structural fatigue in buildings and infrastructure.

Frequent, moderate losses are replacing rare, large-scale catastrophes.

 

Individually, these losses may appear manageable. Collectively, they are not.

For reinsurers, this pattern represents one of the most challenging risk profiles: high-frequency, geographically concentrated losses.

 

 

 

 

How Reinsurers Now View the Mediterranean

 

 

The Mediterranean is no longer perceived as a low-volatility region by global reinsurers. Flood, flash rainfall, and secondary perils have become central to treaty discussions.

 

From CAN Sigorta’s standpoint, the message from the reinsurance market is clear:

 

Reinsurance is no longer just providing capacity.

It is actively evaluating underwriting discipline.

It is testing portfolio intelligence.

It is measuring risk awareness.

 

Reinsurance today functions less as a safety net and more as a mirror.

 

 

 

 

What That Mirror Reflects

 

 

The reinsurance market is sending a consistent signal:

 

Weak underwriting cannot be transferred.

Generic pricing cannot offset localized risk.

Data without human interpretation leads to blind spots.

 

Companies that understand this adapt.

Those that do not face higher retentions, reduced capacity, and tighter terms at every renewal.

 

 

 

 

Where CAN Sigorta Differentiates

 

 

At CAN Sigorta, we do not view climate risk as a pricing issue alone. We treat it as a structural underwriting challenge.

 

Our approach is built on three pillars:

 

Regional risk intelligence

Risk is not uniform, even within the same city. Topography, construction practices, drainage quality, and historical loss behavior matter.

 

Selective underwriting discipline

Selling coverage is easy. Selling the right coverage to the right risk requires restraint. We are prepared to decline or restructure risks that compromise portfolio stability.

 

Transparent reinsurance dialogue

We do not obscure our risk profile. We explain it. We show where risk is intentionally assumed and where it is consciously avoided.

 

This transparency builds credibility. Credibility preserves capacity.

 

 

 

 

Why the Hybrid Model Matters in a Climate-Driven Market

 

 

In a changing climate, neither purely digital nor purely traditional insurance models are sufficient.

 

Algorithms depend on historical data.

Climate change disrupts historical patterns.

 

Human judgment understands present conditions.

But without data, it cannot scale.

 

CAN Sigorta’s hybrid model exists precisely for this reason. We combine digital intelligence with local expertise. Data informs decisions. Human judgment validates them.

 

This approach produces what reinsurers value most today: controlled, intelligible risk.

 

 

 

 

Flood Risk: A Deliberate Boundary

 

 

Flood exposure is currently the most sensitive reinsurance trigger in the Mediterranean. CAN Sigorta takes a deliberately cautious position on flood risk.

 

We understand that:

 

• Flood losses rarely occur in isolation
• Single events often generate multiple simultaneous claims
• Aggregation risk destabilizes reinsurance structures

 

 

As a result, certain risks are declined, restructured, or tightly conditioned. This is not a loss of business. It is a long-term investment in sustainability.

 

 

 

 

Reinsurance Is a Partnership, Not a Disposal Mechanism

 

 

CAN Sigorta does not treat reinsurance as a tool to export poor risk decisions. That approach is no longer viable.

 

Effective reinsurance relationships require:

 

• Clear understanding of risk boundaries
• Acceptance of what cannot be transferred
• Discipline in portfolio construction

 

 

Speaking the same language as reinsurers is not optional. It is essential.

 

 

 

 

Climate Change Is Now a Balance-Sheet Issue

 

 

In the Mediterranean, climate change directly impacts:

 

• Loss volatility
• Capital efficiency
• Reinsurance pricing
• Long-term profitability

 

 

This is not a future scenario. It is a present reality.

 

The insurers who will remain competitive are not those who sell the fastest, but those who manage risk most intelligently.

 

 

 

 

Conclusion: Adaptation Is the New Qualification

 

 

Mediterranean insurance markets can no longer operate on legacy assumptions. Reinsurance will not tolerate it. Capital will not support it. Sustainability will not allow it.

 

CAN Sigorta views this transformation as a filter, not a threat.

It separates true risk managers from volume-driven sellers.

 

We have chosen our position clearly.

 

Insurance is not a product to be sold.

It is a risk to be managed.

 

And in a climate-altered world, that distinction defines survival.