Munich Re likes all-risk covers, need not press for named perils

Global reinsurer  Munich RE need not lead the reinsurance fight to move treaty reinsurance towards greater separation of named perils as the group’s own internal earnings diversification mutes nat cat impact, a top official has indicated.

“The need to change anything is less pronounced for us than for others,” CFO Christoph Jurecka told his company’s Q3 earnings conference for market analysts.

“We are also affected by catastrophic events when they occur, but we are able to mitigate quite nicely with our diversified business model.”

The reinsurance business model is therefore “very stable.”

“We can do what we are doing: … making money by taking the risk from the balance sheets of our cedants,” Jurecka said. “It makes a lot of sense for us.”

A large swathe of global reinsurers have pressed for a response to years of property reinsurance losses with a focus on structures, even preceding the drive for additional rate. An increase in retention rates after a decade’s worth of stability is the most frequently named demand, a move to named perils is also a frequent call.

Demands for separation of named perils are particularly pronounced for European cedants where all-risk coverage is the more entrenched standard.

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