News


22.10.12 MONDAY


tensions in casualty business The economic environment is putting pressure on casualty rates in particular and reinsurers must work closely with clients to solve these tensions, says Munich Re.


Better client liaison needed to solve


economic environment. Historically low interest rates are causing the industry many problems, especially on long-tail lines, and this dynamic must be factored into the way business is priced. A number of very different scenarios, some with grave consequenc-


M


es for insurance business, have to be considered in risk management,                insurance and reinsurance undertakings, above all on the investment side,” he says. “Historically low interest rates are burdening the business model, partic- ularly in the case of savings and pension products and long-tail liability cov-


unich Re says it is trying to work much more closely with its clients to mitigate the many problems being caused by the uncertain


ers. Against this background, the renewal of reinsurance trea-   Hertl says that, more than


ever, the industry faces the chal- lenge of achieving stable earn- ings in its core business and reducing its dependency on its investment returns. But he says the critical question is to what extent insurers and reinsurers succeed in factoring the low in- terest rate level into their price calculations. As the reinsurance markets


Franz Hertl, Munich Re


    Munich Re expects that prices, terms and conditions will largely remain stable in the upcoming renewals in terms of catastrophe business as long   In the casualty classes, however, Munich Re believes prices will stabi-


lise, with a trend towards slight increases. “Especially in these classes of business with very long-tail covers, the


  


 can only be partly compensated for by investment gains. This must be factored into our pricing, particularly for long-term business.” He says the only way this challenge can be overcome will be by closely


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matching assets to liabilities and adapting the strategy around insurance products. “It is feasible to dampen the consequences of further possible upheavals in the economic environment. Munich Re supports its clients  capital optimisation.”  and the company’s reliability in terms of settling claims. “On this basis, we offer our clients – also in troubled economic times – risk transfer solu- tions that provide relief and spur their business. For this, however, we need  In the context of Baden-Baden, Hertl also states that Germany re- mains an important market for Munich Re. He says in recent years, the reinsurer has systematically and successfully expanded its client relation- ships and acquired new clients in the market. “We offer our German customers the full range of services and a


broad spectrum of training measures, assisting them in the development of products, for instance for renewable energies,” Hertl says. 


16 | INTELLIGENT INSURER —BADEN-BADEN TODAY | Monday October 22 2012 www.intelligentinsurer.com


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