Munich Re Syndicate sees ‘significant’ rate increases for insurance

Most lines of business in Munich Re Syndicate’s portfolio are seeing rates increase and, in some cases, a quite significant increase, according to Dominick Hoare, the syndicate’s group chief underwriting officer.

“It’s a very interesting time in the insurance market right now,” he told Baden-Baden Today, adding that the increases “were a result of the best part of a decade of loss-led rates”.

He said that while a lot of capital is still out there, entities are losing money, and the boards of various companies are now saying “we have to do something about this, we can’t carry on”.

“For the global market, broadly speaking, we’re seeing rates increasing, which is encouraging.

“We underwrite a broad array of products, and within that apart from perhaps one or two lines they’re all seeing rate increases,” Hoare said.

He added that the syndicate had seen increased opportunities in some of its traditional lines such as marine, in terms of cargo or yacht business.

“It’s gone from a very distressed market to one that has some quite interesting opportunities. If you look at the cargo business, it’s a core line for us, it has been under pressure, but we’re suddenly seeing the availability of capital,” he explained.

“The opportunities we’re seeing are twice as many as a year ago. The number of submissions to our team is double what it was a year ago.”

Within those submissions there are some interesting opportunities, he added. Where perhaps a year ago the rating would have been adequate, now there is adequacy and opportunity.

“A lot of this, in Lloyd’s terminology, is because we are a light-touch syndicate, so we are not as premium-constrained as many others. With a degree of common sense we can take advantage of opportunities where others are probably still having to scale back,” he said.

Hoare also sees opportunities in property. “It is not traditional for us but certainly if you look at US property rates there is opportunity there.

“Through consortia in the Lloyd’s market we can probably take advantage of that by hooking up with someone who has the expertise and the track record in providing capacity on a consortium basis,” he concluded.