Joachim Wenning, Chairman of the Board of Management and CEO at Munich Re, has said that the global reinsurer expects current, favourable market conditions to persist beyond next year and into 2025.
Wenning stated in the recently held Munich Re earnings call, that in Munich Re’s view, “the favourable market environment will not only sustain into 2024,” but that “it will probably sustain into 2025 as well.”
He explained that while it’s impossible to predict the large loss environment going forwards and how the capital markets may or may not impact available capacity, impacting the supply demand dynamics, “there is simply too much ongoing uncertainty around in the market and too much to still catch up to worry about rates broadly decreasing.”
Giving current market examples, he spoke about the personal lines business, stating that there is more to be done.
“Just take motor business in many of the international markets – it’s obvious. But then there is climate change and related losses, whether the big, large ones or the more local ones, it’s obvious that losses practically have doubled in recent years. And this trend will not become cheaper, if at all will become more expensive,” continued Wenning.
He also commented on the need for insurers and reinsurers to offer more capacity in areas like cyber, suggesting an opportunity for growth in this expanding line of business.
“Inflation is somehow lower, yes, but it’s still very much there. So, I also don’t see any easing of this and social inflation driven by the US litigation industry, which drives rates up and up or coverages down. I could add more points, but those define our position that we don’t see the positive trend changing any time soon,” said Wenning.
Munich Re today reported that it generated a profit of €2.4bn in H1 of 2023, higher than half of its full-year guidance of €4bn, as the firm remains “on track” to achieve its annual target.
