Munich Re has promised it will maintain underwriting discipline during every phase of the insurance cycle in the face of difficult capital markets and higher losses.

Board member Torsten Jeworrek told a seminar at the annual Monte Carlo Reinsurance Rendezvous last week that escalating claims costs underline the importance of risk-adequate pricing. Globalisation, the related distribution of labour and soaring raw material prices are inflating claims, especially in business interruption.

In addition, the number of large individual losses is on the increase due to windstorms in Europe and hurricanes in the Atlantic, while inundation remains high and continues to trend upwards.

Mr Jeworrek says these factors are consistently factored into Munich Re’s underwriting. The group intends to maintain its clear profit-orientated underwriting policy and only accept risks at commensurate prices, terms and conditions.

“If you offer more security and better service, you should be paid the right price for what you provide,” he said. “This gives our clients the opportunity to select the reinsurance which they consider best meets their needs.”