Christoph Jurecka, Chief Financial Officer (CFO) of Munich Re, stressed this morning that the global reinsurer will continue to be disciplined at the upcoming mid-year reinsurance renewals, and will focus on maintaining the improved terms and conditions (T&Cs) achieved last year.
Early this morning, Munich Re released an impressive set of Q1 2024 results, which included net income of €2.1 billion and a stronger P&C reinsurance combined ratio of 75.3%.
Soon after, CFO Jurecka hosted a Q&A with analysts, during which the mid-year renewals were discussed.
“I think what is very important in our business is that we are disciplined on the underwriting side as well as on the risk taking on the asset side. And I think discipline is really one of the key ingredients which brought us to where we currently are with a very strong balance sheet and nice profitability,” said Jurecka.
He went on to state that Munich Re will continue to be disciplined, explaining that this is “absolutely key” going into the June and July reinsurance renewals.
“And therefore, also, lower attachment points or these kinds of things is clearly nothing we will want to go into, but rather really focus on maintaining the improved terms and conditions and then continuing to write business at the attractive price level where we currently are,” said Jurecka.
According to the CFO, at both 1.1 and 1.4 supply and demand met at very reasonable terms, and the assumption is that this will continue.
However, continued Jurecka, Munich Re’s appetite to be looser on the underwriting side is “absolutely zero, and the discipline needs to be maintained going forward.”
In terms of pricing at the June and July renewals, the CFO explained that there’s currently a plateau.
“I wouldn’t even expect it at this point to go down further, why should it? We have an equilibrium of demand and supply at a very high and attractive level for reinsurance,” he said.
Adding: “And then it remains to be seen what happens, and this will depend very much on the claim development in the second half of the year. Particularly, of course, the hurricane season to come in the third quarter.
“So, therefore, at this point in time I think we can only comment on what we did observe and that was more or less stable price level, and discipline in the market. And discipline not only on prices, but particularly also on the terms and condition side which sometimes matters even more than the price.”
