Monte Carlo 2012: MUNICH Re expects a stable renewal season in 2013

10 September 2012 — Oleg DORONCEANU
torsten_jeworrek1"More than ever, the reinsurance industry faces the challenge of achieving stable earnings in its core business and further reducing its dependency on the investment result. The key question will be how quickly and to what extent insurers and reinsurers will succeed in factoring the low interest-rate level into their price calculations", stated Torsten JEWORREK, Munich Re's Reinsurance CEO, for XPRIMM Publications at the 2012 edition of Les Rendez Vous de Monte Carlo. Yet, the German reisurer expects a stable renewal season in 2013, both in terms of prices and conditions, considering that reinsurance markets still have sufficient capacity at this time

He explained that reinsurers have to operates, already for some time, in a difficult economic environment, characterized by historically low interest rates, a negative real interest rate in some countries, and high volatility in the capital markets. In addition, re/insurers have to be prepare themselves in order to deal with possible withdrawal of individual Member States from the eurozone, the insolvency of states, a giant leap in inflation, or deflation. "Munich Re regards the stabilisation of the eurozone as one of today's most burning political tasks. As a prudent risk manager, we have to prepare ourselves at the same time for very different scenarios", emphasised JEWORREK.

As far as 2013 renewal of reinsurance treaties is concerned, MUNICH Re expects that prices, terms and conditions will largely remain stable, considering that reinsurance markets still have sufficient capacity at this time. This also applies to natural catastrophe business, provided there are no major loss occurrences in the last quarter of 2012. The general improvement in primary insurance prices in the USA, as well as in motor liability business in certain European countries, should have a positive impact on reinsurance rates. In the 2012 renewals, Munich Re has so far been able to improve the profitability of its own business by 2.4%.

At the 2012 edition of the traditional meeting, Media XPRIMM is represented by a team consisting of Adriana PANCIU, CEO, Alexandru CIUNCAN, Managing Partner, Oleg DORONCEANU, International Markets Coordinator, and Dimitrios TSOULIAS, International Markets Counselor.

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