In an exclusive interview with China Daily, Joachim Wenning, Munich Re’s Chair of the board of management, said that the reinsurance giant currently books an annual premium income of approximately $2.19 billion in China, but expects this to rise in the future given the significant risk in the country.
Despite the complicated geopolitical environment, Wenning explained that Munich Re still views China as an important market with promising opportunities.
According to Munich Re’s estimate, roughly 5% of natural catastrophe risks in China are currently covered by re/insurance, but while this up from roughly 3% two decades ago, it compares to a global average of around 38%.
So, it’s clear that China’s insurance penetration rate for nat cat risk remains relatively low, and so offers significant growth potential for players like Munich Re.
As noted by Wenning, Munich Re established a branch company in China two decades ago, and the firm might expand its Chinese business over time as its footprint in the region has the potential to outgrow other markets.
In the interview, Wenning said Munich Re also identifies emerging opportunities in China’s advancements in green technologies and energy investments, and also praised the region’s improving business environment, supported by the insurance regulator.
“The need for reinsurance and the need for global expertise in China is unchanged. I could even say (it) is as vivid as it ever was,” Wenning said to China Daily.
“It is strategic for Munich Re to be in the economy and in the market, locally present, which over time is going to be the largest economy in the world, which over time is going to be the largest insurance market in the world,” he added.
