Outgoing Munich Re Chief Executive Officer (CEO), Niklaus von Bomhard, said in a recent conference on the reinsurer’s earnings he was “absolutely sure” the company would improve as a result of the digitalisation revolution, referring to a double-pronged focus on innovation to drive profitability.
Bomhard emphasized that innovation and digitalisation rewriting the industry was an opportunity for reinsurers not a risk, especially as it could increase flexibility as to where firms position themselves on the “value chain.”
Like other reinsurance giants, Munich Re fell prey to large income losses over the last years as interest rates have fallen and the market softened with growing competition.
The company reported losing a staggering half a billion Euros to lower interest rates and a further estimated €700 million to softening markets.
And while reinsurers have set their hopes on a market upswing as the market hits bottom and comes back up full circle, Munich Re said it’s looking to innovation and digitalisation to revamp the firm’s product offers and position on the value chain.
Bomhard said; “We try to refill the pipeline of those businesses that we lost on the structural side with new businesses and that is why innovation is so important to us. No backlog here, that’s the good news.
“I’m not aware of any skeletons in any closet anywhere. So, no backlog so what you see here is exactly where we stand as of today. And we will continue to deliver and some say because we are so conservative even with outlook.”
Although total shareholder return has been above the index, Bomhard said he believed the company was capable of higher performance levels, but to achieve more “innovation again is key” as well as having the courage to let under achieving business go.