Munich Re expects stable Jan. 1 renewals, growth for industry despite ongoing challenges

Munich Re is expecting “tangible growth” for the insurance industry globally, and stable renewals at Jan. 1 for its own portfolio, the company said this week.

The major reinsurer said that in Asia’s emerging markets, growth in property and casualty insurance will average 11% per year until 2015. In the United States, it said growth is expected to average 3% annually for that same time period, which will also benefit the reinsurance industry.

“The overall economic situation remains clouded by uncertainty. Reinsurance is still indispensable for many primary insurance clients because of their growing need for tailor-made solutions”, said Torsten Jeworrek, the Munich Re Board member responsible for global reinsurance business.

However, challenges remain as investors such as pension funds increasingly enter the sector, for things like coverage of natural catastrophes, such as hurricanes, Munich Re said. This is adding to segments already under pressure, the company said.

“Broadly diversified reinsurers like Munich Re offer their clients far more than just capacity. We demonstrate this particularly in the case of complex risks such as large industrial risks, and also in segments that are not standardised such as liability, agricultural reinsurance or aviation,” Jeworrek said.

“Munich Re considers itself to be well positioned for the forthcoming negotiations,” the company noted. “Particularly in the current difficult economic climate, primary insurers benefit from reinsurance solutions as a flexible instrument for improving their risk and capital management.”