Munich Re has flagged its intentions to push for higher renewal rates on casualty and liability treaties due to the ongoing low interest rate environment.

Speaking at the reinsurance industry’s annual Baden Baden meeting in Germany last week, which typically kicks off negotiations for January 1 reinsurance renewals, Munich Re board member Ludger Arnoldussen said prolonged low interest rates are affecting investment returns across the industry.

“Our prudent investment strategy is now proving its worth; investment diversification is more important than ever,” he said.

Munich Re believes “due account” of the reduced investment income should be taken in pricing calculations, particularly where long-tail risks are concerned.

“In the current environment, this will be a major issue in the forthcoming renewal negotiations as well,” Mr Arnoldussen said.

He said that premium increases so far this year “have not been uniform across the market” but confined to loss-affected regions.

“In markets with claims burdens, we have been able to achieve significant natural catastrophe price increases in 2011,” he said, adding that reinsurance premiums during the year have increased 40-50% in Australia and New Zealand and 10% on natural catastrophe business in the US and Latin America.

Mr Arnoldussen says Munich Re expects the trends established this year to continue into the upcoming reinsurance renewals.

“We are seeing a general stabilisation in prices, coupled with hardening markets in a number of segments,” he said. “Particularly in times of greater uncertainty, staying strictly focused on adequate profitability is more essential than ever.”