Reinsurance giant Munich Re has announced that it will merge the reinsurance operations of its Munich Health unit with its Munich Re Life department, and has appointed member of its Board of Management, Thomas Blunck, to lead the operation in the future.
The Germany domiciled reinsurance company also announced that it’s primary insurance health business is to be transferred to ERGO International, which, alongside the merged units and the overall disbanding of the Munich Health field of business, comes into effect February 1st, 2017.
The restructuring of its health business across the Munich Re Group, says the reinsurer, will release cost synergies that in turn will enable the firm to reduce the size of its Board of Management.
Nikolaus von Bomhard, Chairman of the Board of Management at Munich Re, said; “The high-growth health market – boosted by increasing prosperity, demographic change and medical advances – will remain important for us even after the reorganisation. Our strategic ambition and expected returns from health business will not change.”
The reinsurer explains that the Munich Health unit is the smallest of all its lines of business, generating profit of €76 million during the first nine-months of 2016.
Initial growth and revenue targets for the Munich Health unit have not been realised overall, says the firm, and the restructuring of the unit will hopefully position the firm to capitalise on expected health market trends in the future.
“The increasing digitalisation of insurance processes, which results from the availability of large data volumes and new evaluation methods, is an important driver behind this trend. In addition, reinsurance is becoming increasingly important for capital management, and for those transactions the respective classes of business play a minor role,” said Munich Re.
As noted, Board of Management member Thomas Blunck, who has been the Board member responsible for Special and Financial Risks (SFR) since 2005, will lead the company’s restructured life and health reinsurance business in the future, responsible for integrating the two business lines.
He will also be tasked with driving the development of Digital Partners, Capital Partners, and Reinsurance Investments, says Munich Re.
As part of the restructuring and resizing of its Board, the reinsurer has revealed that Doris Höpke, the Board member responsible for the soon to be disbanded Munich Health, will replace Blunck and take over the SFR department.
Furthermore, following the appointment of Joachim Wenning as Chairman of the Board of Management at the end of April, 2017, Höpke will be responsible for human resources in reinsurance and also the function of Labour Relations Director.
“The Special and Financial Risks division (SFR) is heavily involved with topics that offer great reinsurance opportunities – whether in terms of cyber coverage, or innovative insurance products for industrial and major clients. These important future issues are actively explored by SFR and allow us to provide impetus for the whole industry.
“Around 13,000 people across the world work for Munich Re in reinsurance. In order to influence change in our industry, we will need to rely on excellent risk expertise and entrepreneurial skills at all levels. This will be something to which I will pay close attention,” said Höpke.