The fast-changing modern economy will deliver further growth in the reinsurance market, Munich Re board member Karl Wittmann predicts.

“There is a great future for reinsurance,” he said. “At the end of the eighties we said the demand for reinsurance was about to enter into a process of decline.

“But those forecasts were wrong. In the nineties the trend was completely reversed. The reinsurance market as a whole will remain a growth market.”

Wittmann, who has been in the reinsurance industry for 40 years, said he was confident it would expand because of the demands of a number of factors which make up everyday life. These include urbanisation, globalisation, high-technological business and conservation.

But he added climate change was affecting the industry, as last year about £400m was paid out for natural disasters.

“I bet we didn't earn anything in premium for those flood events,” Wittmann said. “That has to change. Because if it doesn't, there won't be a reinsurance market anymore.”

He said the use of advanced technology would help companies become more efficient.