Munich Re expects to hold pricing power during renewal

Munich Re expects to hold its pricing power steady on its portfolio of contracts with insurers when they are renewed on January 1.

Its comments came during a media briefing yesterday, as annual negotiations between (re)insurers and their insurance company clients got under way in the southern German resort of Baden-Baden.

Board member Ludger Arnoldussen said: “Munich Re sees itself as well-positioned for the forthcoming treaty renewal negotiations in (re)insurance business, and expects prices for business in its own portfolio to remain largely stable.

“Special circumstances apply to the German market, where the high claim burden from natural hazard events in the current year will play a major role in the renewal discussions,” he added, referring to flooding and hail storms over the summer that required insurers to pay out billions of euros in damage claims.

Munich Re renews about half of its €17bn (£14.4bn) global property and casualty book on January 1.

Many observers have suggested (re)insurance prices would be under pressure in 2014 from an inflow of capital from pension funds, which is increasing the supply of (re(insurance available in the market, Reuters reports.