Munich Re can grow in cyber, but loss trends force rate hikes

Munich Re is ready to grow its book of European cyber coverage, but warns that rising loss trend merits a continued push on rates, executives indicated in a media briefing preceding the Baden-Baden reinsurance meeting in Germany.

“We plan to grow in Europe,” Munich Re’s chief executive manager for Germany, European and Latam cyber Caludia Hasse said.

Munich Re claims an industry-beating loss record, but a rising loss trend nonetheless, forcing the pace of continued rate increases.

Munich Re claims a worldwide combined ratio in cyber at around 85%, just a “notch” below its combined ratio for the line in Europe where Munich Re admits to “a few larger single losses.” Munich Re compares to what it believes is an over-100% combined ratio for the broad market in Germany.

“In our portfolio we see an increase in losses, but not to the same extent,” Hasse said. “But with loss trend and accumulation potential, our technical price will increase in Germany and in Europe.”

Munich Re sounds confident on the segment as a whole but joins the industry warnings that a fresh look at exclusions is required. “Most cyber risks can be modelled,” she said. “But there are limits.”  New wordings flowing out of the London Market must be translated across European markets.

Munich Re hopes to grease cyber policy sales at the level of primary insurance by supporting primary coverage agents. A “tool kit” for helping agents advise their clients is being rolled out and will soon be expanded to allow agents to bind “on the spot.”

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