×

Munich Re Says Reinsurance Price Pressure Rises

Reinsurers are under rising pressure from their clients to cut premium prices, but levels are still adequate, Munich Re said on Sunday.

"Price levels generally risk-adequate, despite mounting pressure," the world's second-largest reinsurer said in slides handed out at a news conference at an annual industry meeting.

Munich Re said it would push through price rises in some areas at the January renewals, when new annual risk cover contracts bought by insurance clients come into effect.

The company also said markets were "harder than certain sections of the industry expected", using an industry term to describe a market in which prices hold up well.

Analysts and rating agencies expect prices to fall at the annual round of contract negotiations, due to a lack of large catastrophe claims in the past 18 months that could have meant reinsurers have posted strong profits.

Asked whether he agreed with the predictions of a number of credit-rating agencies that prices could drop by as much as 10 to 15% in the January renewals, Jeworrek said, "I am in absolute disagreement with such a statement."

"I see in some areas the need for price rises," he said, citing property catastrophe markets in Europe, which have been hit with the Kyrill storms and major floods in Britain and Switzerland this year that may cost the industry nearly 10 billion euros (US$13.69 billion).

Asked whether he expected to get price hikes in these areas, despite the increasingly stiff competition in the market, he answered, "Yes".