Global reinsurance big Munich Re mentioned this morning that it has extra capability available for pure disaster dangers, so long as the market stays disciplined and worth in addition to phrases and situations proceed to be acceptable.
In a briefing held upfront of the annual Baden-Baden reinsurance assembly in Germany, Munich Re highlighted the rising variety of main disaster losses in Europe.
Clarisse Kopff, Member of the Board of Management, mentioned that “it has been an increasing trend, an increase in frequency and an increase in severity.”
The reinsurer mentioned there was “an unprecedented series of natural catastrophe losses exceeding the 1-billion-euro mark this year.”
Which Munich Re says shall be one of many components “at the centre of the upcoming renewal discussions.”
Munich Re clearly sees a chance to reply and assist insurers with extra capability to soak up nat cat dangers, however this gained’t be at any cost.
“As leading provider in Europe, Munich Re is able to allocate additional capacities for natural catastrophes and other types of risks, provided that appropriate prices, terms and conditions can be achieved,” the reinsurance firm mentioned.
Adding, “Both delivering added value for clients and maintaining the quality of its own portfolio are top priorities in the renewals. To achieve this Munich Re will continue to pursue a policy of disciplined, technically sound underwriting, allowing it to make capacity commitments early in the renewal process and on the basis of clear criteria.”
Kopff mentioned that Munich Re has adjusted its reinsurance phrases and situations in response to disaster loss developments, however can also be increasing its mannequin to cowl extra of the secondary and climate perils.
“We have our scale and diversification, so we can remain a substantial and predictable player,” Kopff mentioned on nat cat dangers.
“We still have appetite, provided we can get the proper prices.”
Munich Re is “ready to offer high capacity” for nat cat dangers and believes the upwards pattern in losses in manageable, by means of disciplined underwriitng.
Also, Kopff mentioned, “we’re not dependent on retrocession,” explaining that Munich Re’s purchasers can depend on predictable capability simply after they want it and the reinsurer can supply capital effectively upfront of the renewals, because it doesn’t want to attend for any third-parties to come back into line.
“Natural catastrophes have always been at the core of Munich Re’s business. When top capacities are called for, we are a stable and dependable provider. We can see that, given the challenges posed by climate change and its growing economic impacts, there is a lasting demand for our core competences on the market,” Kopff mentioned.
Kopff of Munich Re additionally mentioned that the European incremental demand for nat cat is predicted to be round EUR 5 billion, which is similar determine cited by Swiss Re this week.
Kopff went on to say that Munich Re shouldn’t be anticipating any vital inflows of capital to the reinsurance house, both conventional or various.
These feedback counsel main reinsurers shall be working exhausting to keep up worth and phrases, which may move throughout the market and drive a secure renewal surroundings, particularly if inflows of capital usually are not vital across the 1/1 renewal season.
Read all of our reinsurance renewals information and evaluation.
