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BYD first outsold Tesla in the continent in April

BYD sold more cars in Europe than Tesla TSLA -0.59%decrease; red down pointing triangle once again last month, a sign that Elon Musk’s electric-vehicle maker continues to face stiff competition from its Chinese rival as it expands aggressively in the continent.

New-car registrations for BYD models, a reflection of sales, more than tripled on year to 9,698 vehicles across the EU in July, according to the European Automobile Manufacturers’ Association, an industry body also known as ACEA. When including the U.K., Iceland, Liechtenstein, Norway and Switzerland, sales more than tripled to 13,503 vehicles.

In contrast, registrations for Tesla models in the EU contracted more than 42% to 6,600 cars, extending a streak of disappointing EU monthly sales for the company this year. December marked the last month when Tesla logged higher sales in the EU, with 5.9% growth.

Chinese carmakers have been expanding aggressively in Europe, winning market share from domestic rivals thanks to their relatively cheap and varied lineups of electric vehicles. Chinese state-owned automaker SAIC Motor also outsold Tesla in Europe in July, according to ACEA data. BYD first outsold Tesla in the continent in April, according to data from JATO Dynamics, a consumer-research group.

Aside from stiff competition overseas, Tesla has been dealing for months with the fallout from Musk’s previous involvement with the Trump administration. Investors were concerned the billionaire wasn’t spending enough time at the company during his time in Washington.

Tesla’s net income dropped 16% in the second quarter. The company has been revamping its lineup lately to appeal to more buyers. Since March, it has refreshed its Model Y crossover SUV, made updates to its luxury Model S and Model X vehicles and released a pared-down, lower-cost version of its Cybertruck.

July’s sales decline for Tesla models in the EU came despite signs that the bloc’s EV market is improving. Sales of battery-electric vehicles increased 39% on year, with 58% growth in Germany alone. Registrations of hybrid-electric cars rose more than 14%, while plug-in-hybrid models climbed 57%.

ACEA said overall EU passenger-car registrations grew 7.4% in July to 914,680 vehicles. Sales were up 11% in Germany, but down 7.7% in France and 5.1% in Italy. Germany’s Volkswagen Group logged sales growth of nearly 14%. Stellantis, the owner of the Jeep and Dodge brands, recorded a 0.9% decline in overall registrations.

WhatsApp is launching a new AI feature that allows users to rephrase, proofread, or adjust the tone of their messages, the Meta-owned company announced on Wednesday.

The new feature, called “Writing Help,” uses Meta’s Private Processing technology, which allows users to receive AI-generated responses without Meta or WhatsApp reading the original message or the suggested rewrites. This means that messages on the platform remain private even if people use the new tool.

With Writing Help, users can get AI-generated suggestions that rewrite their messages in a professional, funny, supportive, or rephrased way.

WhatsApp showcased the feature in a product image displaying a user’s original message: “Please don’t leave dirty socks on the sofa.” The AI then offers “funny” rewrites, such as: “Please don’t make the sofa a sock graveyard,” “Breaking news: Socks found chilling on the couch. Please move them,” and “Hey, sock ninja, the laundry basket is that way!”

With this launch, WhatsApp is likely hoping that people use its in-app technology when drafting messages, rather than external tools like ChatGPT.

Of course, not everyone will be fond of the new feature, as users likely prefer authentic, personal conversations with friends and family over AI-generated messages. Using AI to rewrite an email is one thing; using it to message your grandma is another.

WhatsApp says users can access the new feature by tapping the new pencil icon that appears when drafting a message in the app.

Writing Help is rolling out in English in select countries starting Wednesday.

The latest incarnation of the two parties' ongoing collaboration boasts clinical backing and will debut Sept. 3.

Victoria Beckham is putting her best face forward, in more ways than one.

On the heels of releasing the joint financial results of her fashion and beauty businesses, Beckham is also gearing up to launch The Foundation Drops, her take on beauty’s largest category, as part of her brand’s ongoing collaboration with Augustinus Bader.

It will debut for $110 on Sept. 3 in 19 shades before rolling out to the brand’s full distribution, which now includes Neiman Marcus, Bluemercury, Nordstrom Inc. and Printemps in the U.S., as well as a slew of other partners globally.

“I wanted to create this right at the beginning of Victoria Beckham Beauty,” Beckham said of the launch, which took six years to perfect. “But it was very apparent that it would be a huge undertaking because it’s such a competitive category, and I wanted to do it in a way that felt innovative and honest.”

As with each of her new launches, Beckham was guided by the integrity of the product and wouldn’t compromise on either performance or payoff.

“For me, it’s all about the product, the why of the product, making sure that I’m not settling and that I truly believe everything is best-in-class before I put it out there,” she said. “Everything has a point of view. This is a saturated market. It’s not about adding product for the sake of it, there’s a real reason why. Ultimately, everything is what I desire and can’t find.”

To that end, Beckham had a handful of pain points she was solving for. “I’ve tried so many foundations. I wanted something that was going to conceal, even out my complexion, and treat my skin at the same time, not irritate it. Lots of people claim to have skin care within their foundation, but that was not enough for me.”

That was the rationale behind expanding Victoria Beckham Beauty’s partnership with Augustinus Bader, which currently comprises a concealer, a serum and an illuminator.

Adding functional levels of TFC8, Augustinus Bader’s proprietary technology, to a pigmented formula came with its own set of challenges, said brand cofounder Augustinus Bader in an email.

“TFC8 is a highly sophisticated technology that works best in direct contact with the skin, guiding key nutrients to support its natural processes of repair and renewal. In a makeup context, the question became how to preserve the full efficacy while also introducing color,” Bader said.

The formula, as it currently stands, “allows pigments to diffuse seamlessly while ensuring that the actives remain unobstructed and fully effective. The result is a formula that balances performance and permeability in a way not typically seen in makeup, delivering both immediate coverage and long-term skin benefits,” said Bader.

At $110 per bottle, that puts the foundation squarely in the luxury price range, which has been challenged across categories in beauty in the U.S., with the exception of fragrance. Per financial results released Tuesday, Victoria Beckham is bucking that trend across both her fashion and beauty businesses. Revenues for both topped a combined $150 million, driven in part by all three categories of the beauty business. Complexion is expected to make up around 20 percent of the beauty business’s volume, which also gets a boost from hero Satin Kajal Liner and its growing portfolio of fine fragrances.

“We are, as a company, showing solid and sustainable growth on top and bottom lines from an EBITDA [earnings before interest, taxes, depreciation and amortization] perspective,” said Lauren Edelman, Victoria Beckham Beauty’s chief executive officer, who assumed the role in January. “When I look at what’s working for beauty, it’s our core competency: making best-in-class product.”

Edelman acknowledged that complexion is the largest segment of the makeup category, and also said it was the brand’s most requested product. Perfecting the launch strategy took as much finesse as the formula did.

“It’s typically a very hard category to build, particularly if you come from a fashion or a color perspective, because clients will ask if you really know the technology or understand how to make a great complexion product,” Edelman said. “Partnering with Augustinus Bader and having TFC8 in the product that actually treats the skin was where we actually saw the opportunity. It’s not just a complexion product, but it does all the great makeup things you need it to, like 12-hour wear.

“From a product perspective, it’s really hard to get wear, comfort, performance and treatment all in one formula,” Edelman continued. “Most brands look to the white space and where the market volume is. If we did that solely, we would have launched foundation years ago.”

The 2024 launch of the concealer pen — at the time, predicted to do around $10 million in sales before the end of that year — helped the brand set the strategy for the launch of foundation. That includes the accompanying marketing, which showcases the 19 shades of the foundation to aid in shade-matching. “It’s also an important brand statement about how you show up and represent skin tones,” Edelman said. “We had such a small wholesale footprint and we knew that we had to have a really compelling online experience so people could find their shade.”

In that vein, the brand is investing meaningfully in digital marketing, but the brick-and-mortar channel has gained significance for the health of the brand as a whole: by launch, the brand will have 150 doors globally, and 200 by yearend.

“There will be an opportunity for people to discover it online, try it in-store, and then come back and shop,” Edelman said. “Knowing how to launch well online really benefited us with this product.”

In terms of education, that’s where clinical testing comes in. “The thing we all responded to was the idea that 100 percent of testers saw improved skin elasticity. We’ve seen diminishing fine lines and wrinkles, as well as moisturization. But skin elasticity is such a strong point of difference in terms of a treatment claim,” Edelman said.

As for Beckham, she said she tested the product in a variety of locales — from London to Miami, throughout filming her documentary and on magazine cover shoots. “People are looking for this. They desire it. They appreciate our quest for excellence. People have so much choice, and it’s ultimately about giving them what is not already out there.”

Monarez’s lawyers say she ‘chose protecting the public over serving a political agenda’

The White House said it fired the director of the Centers for Disease Control and Prevention on Wednesday, and several top CDC officials resigned, throwing the agency’s leadership into turmoil.

Susan Monarez, the CDC director, has been removed from her job, the White House said Wednesday evening. “Since Susan Monarez refused to resign, despite informing HHS leadership of her intent to do so, the White House has terminated Monarez from her position with the CDC,” said White House spokesman Kush Desai.

Monarez, who led the agency for less than a month, clashed with Health and Human Services Secretary Robert F. Kennedy Jr. and members of his staff, according to a senior Trump administration official. President Trump had nominated her to lead the CDC in March after dropping his first pick. Previously the agency’s acting director, Monarez was the first CDC head without a medical degree in more than 70 years.

Lawyers for Monarez said that she was notified Wednesday night by a White House staffer in the personnel office that she was fired. Her lawyers said that only the president himself can fire her and for that reason, they reject the notification she received as “legally deficient.”

In an earlier statement, her lawyers also said: “When CDC Director Susan Monarez refused to rubber-stamp unscientific, reckless directives and fire dedicated health experts, she chose protecting the public over serving a political agenda. For that, she has been targeted.”

Meanwhile, three senior CDC leaders, including Dr. Debra Houry, the agency’s chief medical officer, submitted their resignations Wednesday, according to emails viewed by The Wall Street Journal.

The Department of Health and Human Services said Monarez was no longer CDC director and that Kennedy had full confidence in his team at the agency.

The Washington Post reported the news of Monarez’s ouster earlier.

The CDC is a division of HHS, which is overseen by Kennedy, a vaccine skeptic. A major source of disagreement between Monarez and Kennedy was over the CDC’s guidance on vaccines, according to the administration official. The agency issues recommendations on what vaccines adults and children should take.

In late July, Monarez was confirmed by the Senate in a 51-47 vote, along party lines. On Wednesday, Democrats who had voted against her nomination decried the effort to remove her.

“I had serious doubts about CDC Director Monarez’s willingness to stand up against RFK Jr.’s personal mission to destroy public health in America—I’m glad that I was wrong,” said Sen. Patty Murray (D., Wash.) on X. “If there are any adults left in the White House: we cannot let RFK Jr. burn what’s left of CDC. FIRE HIM.”

Sen. Bill Cassidy (R., La.), a medical doctor who was a pivotal voice in Kennedy’s confirmation fight in February, said late Wednesday that the CDC’s “high-profile departures will require oversight” by the Senate health committee that he runs but offered no further comment.

In backing Kennedy’s confirmation, Cassidy said at the time that he secured a number of concessions, including promises to maintain current federal vaccine recommendations and keep intact CDC website pages that say there isn’t a link between vaccines and autism.

About a week after Monarez was sworn in, a gunman who authorities said had been critical of the Covid-19 vaccine opened fire outside the CDC’s Atlanta campus, killing a police officer and striking six of the agency’s buildings. The shooting marked a devastating blow to morale following a swath of layoffs across the agency earlier this year, according to current and former employees.

Hundreds of current and former employees at the CDC and other federal health agencies said the attack came as Americans’ distrust of public health institutions grows and federal leaders politicize and tout health misinformation, according to a letter they wrote to Kennedy and members of Congress last week.

“When the federal workforce is not safe, America is not safe,” they wrote in the letter. “Health and Human Services Secretary Robert F. Kennedy, Jr., is complicit in dismantling America’s public health infrastructure and endangering the nation’s health by repeatedly spreading inaccurate health information.”

Many employees at the agency in Atlanta have been working remotely in the weeks since the shooting.

Monarez has a Ph.D. in microbiology and immunology from the University of Wisconsin-Madison and did postdoctoral research at Stanford University. She was previously deputy director at the Advanced Research Projects Agency for Health, known as ARPA-H, a government agency working to develop healthcare products on a faster timeline.

The White House withdrew Trump’s first choice for CDC director, former congressman Dr. Dave Weldon, after senators worried he wasn’t qualified.

Houry, one of the senior CDC leaders who submitted her resignation, wrote in a note to colleagues that vaccines save lives and “the overstating of risks and the rise of misinformation have cost lives.” She cited the recent attack on the agency’s headquarters and the three-decade high in U.S. measles cases, which has led to three deaths.

“For the good of the nation and the world, the science at CDC should never be censored or subject to political pauses or interpretations,” she wrote, according to the email obtained by the Journal.

“I am committed to protecting the public’s health, but the ongoing changes prevent me from continuing in my job as a leader of the agency,” she added.

Dr. Demetre Daskalakis, director of the CDC’s National Center for Immunization and Respiratory Diseases, also submitted his resignation.

“I am not able to serve in this role any longer because of the ongoing weaponizing of public health,” he wrote in an email.

The Great Art Fraud TV review — the rise and fall of charismatic con artist Inigo Philbrick

A new BBC2 documentary explores how the disgraced young art dealer was caught and charged with fraud

In May 2022, the disgraced young art dealer Inigo Philbrick was sentenced to seven years in a US prison for wire fraud, having deceived investors and collectors out of an estimated sum of more than $86mn. The Great Art Fraud, an extensive and riveting documentary, explains what he did and how he did it, as well as having a good stab at putting its finger on why. The story combines crime and high farce, and it makes for a rollicking ride.

Philbrick was a wunderkind who began his career as an intern at White Cube gallery in London, and soon came under the tutelage of its owner, the modern art mogul Jay Jopling. By the time Philbrick was in his early 20s, he was running a gallery, bankrolled by Jopling, and was managing substantial funds for major collectors. The sums involved are eye-watering. In 2011, he made a splash when he purchased a piece by Andreas Gursky for a client, setting the then record highest price ever paid for a photograph at $4.3mn. This piqued the interest of the US mega-dealer Larry Gagosian, who sent over an assistant to find out who had made this deal.

Philbrick tells this story, and others, with flair. The many critics, gallerists, financiers and dealers who speak here note his charm and confidence, and, over the course of a substantial interview with him, that is certainly in evidence. Even over a phone call, conducted when Philbrick is in prison, he comes across as genial. The first episode of this two-part documentary examines his rise and his unravelling; the second, his flight from the onslaught of lawsuits and the arrest warrant that resulted in an FBI manhunt.

There is frequent mention of how unregulated the art market is, of how secretive and reliant on trust its relationships can be. Philbrick won the trust of many, but the loose theory here seems to be that in trying to match the lifestyles of his clients — yachts, luxury holidays, casual $5,000 bottles of wine — he lost any sense of his own limits. The film does an outstanding job of explaining the intricacies of his corrupt deals — essentially, selling more shares in an artwork than exist, to multiple owners — to the layperson, while maintaining an intimate and insider-ish feel.

At times the commentary is amusingly cutting. Philbrick opens a gallery in Miami because the city has “not quite as much taste” as London, suggests one critic, waspishly. Philbrick’s girlfriend, now wife, Victoria Baker-Harber, who rose to fame on the reality show Made In Chelsea, is candid about their party days. By the time the whole ruse has come crashing down, with an auction at Christie’s involving a Rudolf Stingel painting of Picasso and a fraudulent document, it has become as mesmerising as any thriller.

US president warns progressive billionaire and allies that ‘we’re watching you’

Donald Trump has called for billionaire progressive donor George Soros to face racketeering and corruption charges for supposedly supporting “violent protests” across the US.

In a post on his social media platform on Wednesday, Trump claimed the 95-year-old Soros and his “radical left” son Alex, who leads the family’s philanthropic foundation, “should be charged with RICO”, referring to a statute usually used to combat organised crime.

“We’re not going to allow these lunatics to rip apart America any more, never giving it so much as a chance to ‘BREATHE,’ and be FREE,” Trump wrote on Truth Social. “Soros, and his group of psychopaths, have caused great damage to our Country!” he added. “That includes his Crazy, West Coast friends. Be careful, we’re watching you!”

The broadside came after reports in right-leaning news outlets claimed this month that Open Society Foundations, which distributes grants on Soros’s behalf to progressive causes, was funding protests, especially against the Trump administration’s deployment of troops in Washington DC.

A spokesperson for OSF said of Trump’s comments: “These accusations are outrageous and false. The Open Society Foundations do not support or fund violent protests. Our mission is to advance human rights, justice and democratic principles at home and around the world.”

The tirade against Soros — a Jewish holocaust survivor and frequent target of the Maga right — is the latest attempt by Trump to intimidate political foes with the threat of legal action.

In the past few months, Trump has repeatedly threatened to prosecute or jail politicians, including his former presidential rival Kamala Harris and New York Democratic mayoral hopeful Zohran Mamdani.

He has ordered an investigation into former president Joe Biden and his aides, and suggested a criminal probe into Chris Christie, the former governor of New Jersey and one-time ally.

Last week, the FBI raided the home of John Bolton, a former national security adviser to Trump who has emerged as a strong critic of the president’s foreign policy.

Trump has long reserved some of his sharpest ire for the Soros family, who were among the largest donors to the Harris campaign, spending more than $85mn in the 2024 election cycle. During his criminal trial in New York last year, Trump constantly highlighted that district attorney Alvin Bragg had been backed by Soros.

Trump himself faced Rico charges by state prosecutors in Georgia over his attempts to overturn the results of the 2020 presidential election. The case stalled after the original prosecutor was removed by a higher court.

Trump’s threat on Wednesday garnered support from Elon Musk, who posted that it was “high time action was taken against Soros directly”. Musk previously blamed Soros for protests outside Tesla dealerships at the height of his unpopular tenure in government.

Denmark summons US diplomat over alleged covert influence operations in Greenland

Danish foreign minister accuses ‘foreign actors’ of trying to sway future of vast Arctic island

Denmark has summoned the top US diplomat in the country over reports that American citizens with alleged links to President Donald Trump have been conducting covert influence operations in Greenland.

Lars Løkke Rasmussen, Denmark’s foreign minister, said on Wednesday that there were “foreign actors” attempting to influence the future of Greenland and that all such efforts were “unacceptable”.

He has summoned Mark Stroh, the chargé d’affaires at the US embassy in Copenhagen and its most senior diplomat in Denmark at present, for a meeting at the foreign ministry.

A White House official said late on Wednesday: “We think the Danes need to calm down.”

Denmark has been shaken by Trump’s repeated suggestions that the US wants to take control of the vast Arctic island — a semi-autonomous part of the kingdom of Denmark — from Copenhagen, and his refusal to rule out using force to do so.

The Scandinavian country had already summoned the top US diplomat in May, following a report in the Wall Street Journal that a classified message was sent to American intelligence agencies urging them to identify people in Greenland and Denmark who support Trump’s ambition to take over the island.

The latest report by DR, the Danish public broadcaster, said Danish authorities were aware of at least three US citizens with alleged links to the Trump administration gathering information in Greenland and conducting influence operations.

Rasmussen said in television interviews that he was “not surprised” by the report. But he added: “It’s important that we gain some insight into this so that our people — in both Greenland and Denmark — know what it is that we risk being up against.”

Denmark’s security and intelligence service (PET) said on Wednesday that its assessment was that “Greenland, especially in the current situation, is the target of influence campaigns of various kinds. PET expects that such campaigns have the purpose of creating a split in the relationship between Denmark and Greenland.”

Some senior Danish officials sought to downplay the significance of summoning Stroh, saying that the three US citizens appeared to act in an amateur way and there was no link established to US intelligence.

But Danish politicians reacted with dismay. “This means the whole misery over Greenland is not over,” former foreign minister Martin Lidegaard told the TV channel TV2.

He added: “This is putting a heavy strain on our relationship with the US — and Americans should know that too.”

Aaja Chemnitz, a Greenlandic member of Denmark’s parliament, said: “It is beyond a joke that they try to infiltrate Greenland’s society in this way. It is Greenland itself who must decide what we want and what future we want.”

The allegations come just days after the Trump administration caused pain to Danish business by issuing a stop-work order on an almost complete offshore wind farm co-owned by Ørsted.

That came on the same day that Rasmussen and Denmark’s ambassador to the US signed a partnership with California’s Governor Gavin Newsom, the self-styled leader of the resistance to Trump. Danish officials deny there is a connection between the two events.

A spokesperson for the US state department said it would not comment on the actions of private citizens in Greenland but said Stroh had a “productive” meeting with the Danish foreign ministry.

The US is currently without an ambassador in Copenhagen despite Trump naming Ken Howery, who is close to Elon Musk, in December.

In a separate move, Denmark’s Prime Minister Mette Frederiksen on Wednesday apologised to the thousands of Greenlandic women who over decades were forcibly fitted with contraceptive coils.

She acknowledged that the case had caused “anger and sorrow” in Greenland as well as hurting perceptions of Denmark. “We cannot change what has happened. But we can take responsibility. Therefore, on behalf of Denmark, I would like to say: sorry.”

Many Greenlanders use this issue to express why they want to gain independence from Denmark, but surveys suggest the 57,000 on the Arctic island are reluctant to do so imminently for fear of losing out economically.

New Zealand wealth fund bets European stocks will beat US over coming decade

Move by world’s best performing SWF signals asset owners’ loss of confidence in long-term outlook for US equities

Investment chiefs at the world’s best performing sovereign wealth fund are betting that European stocks will outshine their transatlantic rivals over the coming decade, in a sign that some global asset owners are losing confidence in the long-term outlook for US equities. 

Brad Dunstan and Will Goodwin, co-chief investment officers at New Zealand’s NZ$76bn ($44bn) Super Fund, told the Financial Times in an interview that the European stock market was the fund’s largest “overweight” position versus its reference portfolio, as it takes tactical positions on markets it thinks will perform best.   

“Most recently, we have been short the US and long European equities . . . and that’s purely a view on equity valuations,” said Dunstan, adding that decisions to favour different markets were taken “on a 10-year view”. 

At the end of June, the fund was overweight European equities by 2 per cent and underweight US stocks by 3.5 per cent in its “strategic tilting” mandate, where it expresses equity price views. For commercial reasons, the managers do not disclose the timing of positions taken.

Their investment position centres on a view that European equities — measured by the Stoxx Europe 600 index — are currently priced below their “fair value”, while US stocks are priced above that level and at some point in the next decade will give up that premium. 

“There’s going to be more inflation risk in the US,” said Dunstan, adding that the impact of President Donald Trump’s tariffs was largely “noise” for long-term asset owners. However, he said, the outlook for US interest rates made him and his colleagues believe that US stocks — which currently trade on a price-to-earnings ratio of 27.5 times — were overvalued.

His comments come as European stocks — trading on a PE ratio of about 16 times — have lost ground against their US rivals in recent months, as Trump has dialled back his most radical tariff threats and earnings in corporate America have remained resilient. 

On a 10-year view, the performance of equities in the world’s largest economy has far outstripped that of their European peers, with the S&P 500 index up more than 310 per cent on a total return basis, compared with 115 per cent for the Stoxx Europe 600. 

According to data platform Global SWF, NZ Super Fund — which began investing in 2003 and employs 79 people in its investment team in Auckland — has been the best performing sovereign wealth fund over the past 10 and 20 years, with annualised returns of more than 10 per cent. 

Dunstan said this was because the fund takes “a lot of risk”, which has been rewarded over the past two decades. He said the fund’s “total portfolio” approach allowed managers to be “pretty agile in terms of how we focus the fund”, which had enabled it to outperform other funds with a similar growth strategy. 

The total portfolio approach assesses risk across the whole portfolio, in contrast with the traditional method of setting a framework for how much you will invest in certain assets, through a strategic asset allocation, which can make delivering changes outside those boundaries more time-consuming.

NZ Super Fund’s preference for Europe also extends to private equity, where Goodwin said there was a “good opportunity”. He looks for “younger, hungrier managers” where NZ Super can be a large investor in a PE fund and forge strong relationships with the managers of the companies the fund invests in. 

He added that while PE was a necessary component of the portfolio, given the trend for companies to stay unlisted for longer, some PE funds were currently under pressure as investors started to realise “the markets aren’t necessarily there” for the price levels PE funds are putting on their own assets.

NZ Super Fund has about 5 per cent of its portfolio invested in private equity. Goodwin said he did not expect the asset class to become a “large structural part of our portfolio”. 

Hedge funds’ insurance binge threatens catastrophe cover, warns Munich Re

Reinsurer says private capital’s push into tools such as ‘cat bonds’ risks increases volatility for the sector

Hedge funds and private investors muscling into reinsurance threaten to destabilise the centuries-old market for catastrophe cover, a director at Munich Re, the world’s biggest reinsurer, has warned.

The growing presence of private investors such as hedge funds and family offices in the sector has intensified competition for dominant players such as Berkshire Hathaway, Munich Re and Swiss Re.

But the sector’s shifting shape has introduced new risks and greater volatility into the reinsurance market, Stefan Golling, a board member of 145-year-old Munich Re, told the Financial Times.

After a big payout event, private investors could lose their nerve, potentially raising the price of insurance, he said.

“In the traditional market, a big hurricane will not be a surprise,” Golling said. By contrast, he added, “capital is getting involved that is not informed in the same way as an underwriting company”.

Hedge funds such as New York’s Elliott Management and specialist fund managers have pushed into property and casualty reinsurance over the past decade. Alternative capital grew to about $115bn at the end of 2024, up from $93bn in 2022, according to broker Aon.

One way is through catastrophe or “cat” bonds, in which insurers pay investors a premium in exchange for covering risks they face. Another is through so-called sidecars — in effect shell companies that take on risk and issue securities to funds run by asset managers.

These new entrants challenged Munich Re and other traditional suppliers of reinsurance capital in a business built on personal relationships cemented at the industry’s annual conference in Monaco.

Golling said it was a good thing that private entrants were helping to meet the world’s growing need for insurance, which has boomed as inflation, population growth and climate change increase the bill for natural disasters.

However, he questioned whether the newcomers fully understood the risks they had taken on.

“We haven’t seen a 50-year or 100-year event that has exhausted the cat bond market,” Golling said. “It has to be seen whether the capital that backs up those cat bonds will reconsider their strategy after such an event.”

He added that the market had already glimpsed the destabilising effects of a retreat by private reinsurance capital after Hurricane Ian hit Florida in September 2022 — just as insurers kicked off renewal negotiations.

Private investors’ uncertainty about the losses they faced threw the availability of some top layers of reinsurance into doubt, prompting some to withdraw and “stressing” the market, Golling said.  

Reinsurance prices charged by both traditional and private capital firms subsequently jumped.

Golling also criticised private capital for only signing up to cover the most statistically improbable risks, such as megastorms that are expected every few decades, rather than more common events such as hail.

Critics have long raised similar grievances about Munich Re and its peers.

Insurers and governments complain that traditional reinsurers pull back by raising prices after losses — ultimately driving up costs for consumers — and seek to avoid more frequent perils.

Golling suggested that when traditional reinsurers raise prices, it is to enforce strict underwriting standards at the first port of call for policyholders — the primary insurers — that could otherwise jeopardise the long-term profitability of the sector.

“You have to feel the pain yourself,” he said. “That’s the reason why reinsurance companies have tried to increase the retention [deductible] of the primary insurance companies.”