world’s financial market finds itself in opportunities are
presenting themselves to companies positioned to seize them. This
is the view German reinsurer Munich Re is taking as it eyes
opportunities for reinsurance as a direct substitute for what has
become a scarce resource, capital.
“We are certainly seeing a trend where insurance companies are
looking to shift risk away from their books as they simply don’t
have the capital strength to support high-risk exposure,” Ludger
Arnoldussen, a member of Munich Re’s board of management, told
delegates at the 2008 East Asian Insurance Congress held in Hong
Kong in November.
Go deeper with GlobalData
Munich Re, which views Asia as a key element in its growth
strategy, reports that it is experiencing rapid growth in demand
for reinsurance as a capital substitute and anticipates a
“significantly higher” price level for upcoming renewals in January
throughout Asia. In addition to the increased cost and scarcity of
capital as well as growing demand for reinsurance, Munich Re’s
prediction takes into account shrinking capacity of the reinsurance
industry in general and the changed risk environment.
Commenting on market conditions Arnoldussen said: “This is
benefiting strong reinsurers like Munich Re, as primary insurance
companies attach increasing importance to a reinsurer’s financial
strength, stability and risk management capabilities.”
Munich Re is rated AA (very strong) by Standard & Poor’s and
Aa3 (excellent) by Moody’s.
Though Arnoldussen conceded that Munich Re had not escaped the
financial crisis completely unharmed, he emphasised that the
reinsurer’s capital base remains robust. Notably, Munich Re’s
equity capital ended the torrid third quarter of 2008 at €21.5
billion ($27.8 billion), unchanged from the end of the second
quarter and down 15.7 percent compared with the end of 2007.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataMunich Re was voted best overall reinsurer in the Asian and
European life and non-life markets in research firm Flaspöhler’s
2008 survey, which elicited 1,200 responses.
