Reinsurers signal turn in the cycle
German reinsurers say the reinsurance market cycle is turning and expect substantial rate rises to start flowing through.
Munich Re used the annual Reinsurance Week conference in the German resort town of Baden Baden, to issue a report saying that by September the world’s 10 biggest insurers had lost more than a quarter of their market value.
The cost of first-half man-made losses for Munich Re increased in the past year from €71 million ($136 million) to €352 million ($676 million).
“In view of the increased cost of capital, the growing demand and the changed risk environment, we expect significantly higher prices, with percentage increases definitely going into the double-digit range,” the reinsurer said.
Hannover Re subsidiary E+S Ruck anticipates prices will spiral after major catastrophe losses and additional demand for capacity in some lines of business.
Both companies predict a rosy outlook for reinsurers. Munich Re says the financial crisis is increasing the demand for reinsurance and E+S Ruck notes the requirement for reinsurers to retain good credit ratings will keep them financially strong.
Munich Re used the annual Reinsurance Week conference in the German resort town of Baden Baden, to issue a report saying that by September the world’s 10 biggest insurers had lost more than a quarter of their market value.
The cost of first-half man-made losses for Munich Re increased in the past year from €71 million ($136 million) to €352 million ($676 million).
“In view of the increased cost of capital, the growing demand and the changed risk environment, we expect significantly higher prices, with percentage increases definitely going into the double-digit range,” the reinsurer said.
Hannover Re subsidiary E+S Ruck anticipates prices will spiral after major catastrophe losses and additional demand for capacity in some lines of business.
Both companies predict a rosy outlook for reinsurers. Munich Re says the financial crisis is increasing the demand for reinsurance and E+S Ruck notes the requirement for reinsurers to retain good credit ratings will keep them financially strong.