The world’s biggest reinsurer said it was well positioned for negotiations with insurance companies for new contracts for reinsurance cover that take effect on 1 January.
“Munich Re expects prices for business in its own portfolio to remain largely stable,” Munich Re board member Ludger Arnoldussen told a media briefing.
Many observers have suggested reinsurance prices would be under pressure in 2014 from an inflow of capital from pension funds, which is increasing the supply of reinsurance available in the market.
Reinsurance prices in Europe’s largest market, Germany, would reflect loss claims for flooding and hail storms in June and July that cost insurers billions of euros, much of which they passed on to the reinsurance companies like Munich Re, Swiss Re and Hannover Re.
“I would expect prices to reflect the loss experience, so an upward movement in prices,” Arnoldussen said.
While some insurers had very high local exposure to the hail storms and were hit particularly badly by claims, Arnoldussen said the event was likely to prompt a wider review by insurers of the amount of reinsurance cover they buy.
Munich Re itself has pencilled in claims of €180m for the hail storms in late July, of which €160m was allocated to its reinsurance business and €20m to its insurance unit Ergo.
For the June floods, Munich Re sees its share of insured damage at €230m, with a hit of €180m in reinsurance and €50m at Ergo.