- Renewal season for non-life reinsurance treaties due 1 January 2006: Sustained heavy demand for risk protection
- Munich Re further pursues selective underwriting policy: Profitability before growth
- Von Bomhard: Need to take changes in risk situation into account
Munich Re maintains its focus on risk-adequate prices and conditions, an approach vindicated more than ever by current claims trends and risk potential. "There is no alternative to profitable underwriting", was how Chairman of the Board of Management Nikolaus von Bomhard summed up the situation at a press conference held on the eve of the "Rendez-Vous de Septembre" in Monte Carlo. "Losses on the scale of Katrina could happen on any continent."
Hurricane Katrina, the worst event to date in an already hyperactive hurricane season, and last year's series of windstorms have clearly brought home the huge loss potential of extreme weather-related events. The number of events is on the increase, while the concentration of population and values is rising in the areas at risk. Insurers and reinsurers have to take these trends into account, otherwise the private sector will reach the point where it is no longer able to assume such risks.
However, it is not only factors such as the higher claims frequency and greater concentration of values that are aggravating the risk situation but also legislative changes, an unexpected surge in claims costs, due for example to spiralling healthcare charges, or a growing claims mentality among policyholders. One example is the continually soaring cost of severe personal injury claims in France and the UK.
The good news for the insurance industry is that these same factors and trends should further stimulate demand for both primary insurance and reinsurance cover.
The cornerstones of the Munich Re Group strategy for sustainable success are unchanged: a clear focus on the risk aspect, consistently putting "profitability before growth"; optimal business management and control; active risk diversification. Von Bomhard: "We are concentrating on activities where we can use our expertise and financial strength to achieve above-average success. We are ideally positioned to be able to offer tailored reinsurance solutions to meet a broad spectrum of demand. Our clients understand and accept our consistent and dependable stance."
The interim report on the 3rd quarter 2005 will be published on 7 November 2005.
Munich, 11 September 2005
signed von Bomhard signed Küppers
This media information contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.