- Increase in weather-related natural hazard events in Europe
- Need for enhanced quality of information on insured risks
- Munich Re’s Geo Data Service provides tools for efficient risk management and optimised claims management
- Munich Re supports trend towards differentiated reinsurance premiums
There has been a steady rise in weather-related natural catastrophes during recent decades, and this also applies to Europe. Taking inflation into account, economic losses in the past ten years have more than doubled compared with the 1980s, insured losses rising by a factor of 2.5. Weather-related natural hazard events are expected to increase in number and severity in future, due to the impacts of climate change. It is vitally important that insurers and reinsurers have precise information on the insured risks, particularly in densely populated Europe, with its high concentrations of values in major cities and conurbations. With the aid of NatCatSERVICE, one of the world’s largest natural hazards’ databases containing over 25,000 entries, together with geographical information systems, Munich Re has developed powerful tools for its clients that provide the means to assess the risks and prepare natural catastrophe analyses for individual portfolios. The CatLossEstimation Service allows Munich Re to create a forecast of losses affecting client portfolios shortly after a severe weather loss has occurred, thus significantly enhancing claims management. This assumes, however, that the portfolio data are submitted in a form that can be processed by geographical information systems. Dr. Ludger Arnoldussen, member of Munich Re’s Board of Management: "For years we have been pushing for greater transparency of insured risks. This is the only way to ensure that the risks are correctly assessed, that accumulation controls are performed, and that efficient risk management is achieved."
In addition to prices, terms and conditions, the quality of the portfolio data will again be on the agenda in the current renewal round for property-casualty treaties. The more precise the information on the risks covered, the more accurately those risks can be assessed. This applies not only to natural hazard covers but to all insured risks in all classes of business. In the case of major industrial groups especially, where one policy often covers a number of different sites, detailed information is required on each individual location. If there are doubts, risk loadings are added to protect ourselves against possible surprises. Ludger Arnoldussen: "A high degree of transparency in connection with risks makes it easier for insurers and reinsurers to set risk-adequate premiums. In the present 1 January renewals, as in the past, we are asking for what we consider an appropriate price for the risks we write. If we are unable to achieve that price in a particular area, we will use our capital in other areas that provide a satisfactory return. At the same time, we will firmly support the trend towards differentiation in the price paid for reinsurance on the basis of the credit standing of the reinsurer and the service it provides."
signed Dr. Arnoldussen signed Dr. Lawrence
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 Munich Re. The company assumes no liability to update these forward-looking statements or to make them conform to future events or developments.