Munich Re sees premiums fall

30 January 2007

Munich Re has announced that premiums from property and casualty contracts renewed in January fell by three per cent

The fall was due to an almost complete absence of costly natural disasters over the last 12 months and a relatively quiet hurricane season in the Atlantic.

In January, the reinsurance renewed around two thirds of its business - with a premium volume of $11.7 billion.

The firm revealed that it brought in around $1.1 billion in new business with "good profit potential" and had reduced exposure where prices had come under pressure.

Written premiums as of January 1st 2007 are expected to be approximately £388m or three per cent lower than the year before.

The firm stated: "The price evolution varied by line of business and region, rates for the renewed portfolio being slightly lower overall, whilst profitability levels remained good."

Munich Re's outlook for the reinsurance market in the coming year is for capital bases to improve while competition grows more intense.

Torsten Jeworrek, member of the Munich Re board, said: "There is no alternative to risk-adequate prices, terms and conditions.

"Winter Storm Kyrill was a clear demonstration of the growing threat of the natural hazards risk and rising loss potentials. We believe that higher demands on risk management and capital resources and continued low interest rate levels will help to maintain market discipline on the whole."

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