Jorg Schneider, the Chief Financial Officer (CFO) of reinsurance giant Munich Re, is anticipating further and increased rate improvements at the upcoming April and mid-year renewals, owing to a stronger element of the business being non-proportional and natural catastrophe focused.
Speaking during the Germany-based reinsurer’s fourth-quarter 2017 earnings call, Schneider noted that at the January 1st, 2018 renewals season reinsurance market conditions “finally moved back into positive territory.”
Most notably were improvements in loss-affected areas, driven by the huge impacts of hurricanes Harvey, Irma, and Maria, and the California wildfires.
However, non-loss affected business also stabilised at 1/1, said Schneider, continuing to explain that across the entire portfolio, the firm achieved price increases of plus 0.8%.
Schneider said that Munich Re’s underwriters are optimistic that market conditions will continue to improve for the April and mid-year renewals, stating that on a like-for-like basis, “price increases should be north of 0.8% because there’s a stronger element of non-proportional business and of natural catastrophe oriented business.”
Continuing to state that the reinsurance giant is confident pricing has turned and that the January 1st, 2018 rate improvements were not a one time occurrence.
“We think that the market understood that the loss incidents of years 2012 to 2016, and the first-half of 2017 was far from being normal, and that should normalize the market dynamics also,” said Schneider.
