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NU Online News Service, Oct. 26, 3:10 p.m. EDT
Executives at a major reinsurer at a teleconference before this week’s insurance industry meeting in Germany said they see improving conditions for business as demand rises.
“Demand for reinsurance continues to climb in the difficult market environment,” said Martin Albers, Swiss Re executive board member and head of client markets Europe, according to text provided by the company of his and other executives' remarks.
Swiss Re and other firms are attending a meeting of insurers and reinsurers in Baden Baden for discussions of coverage renewal.
Mr. Albers said, “In 2009 so far, conditions in the reinsurance market have continued to improve.” He added that his firm has a large appetite for risk and, if the price is right, the firm is “ready to provide our clients with the capacity they need.”
Swiss Re noted that as a result of the financial crisis, non-life insurers have lost between 15 percent and 20 percent of their capital, and life companies between 30 percent and 40 percent.
The firm added that interest rates remain low and the cost of capital remains high with sound underwriting and client focus providing the basis for sustainable business relationships.
Thomas Witting, head of client markets for Germany and the Nordic and Baltic markets, commented on the price war in the German Motor insurance segment.
“We will become more selective in our underwriting, and are not prepared to participate in the erosion of motor prices under our reinsurance treaties,” he promised.
Mr. Witting said that for European natural catastrophe windstorm events, “higher rates were already becoming apparent toward the end of the 2009 renewal season. These are long overdue and absolutely essential. We expect this trend to continue during the current renewals.”
He said if extra capacity is needed for European windstorm cover, Swiss Re is willing to provide it “at the right price.”
Beat Strebel, head of client markets for Austria, Central and Eastern Europe, said in Austria the rising claims frequency and severity from major natural catastrophes over the last 10 years means the market needs to consider whether current (re)insurance structures and prices are adequate.
He added that for countries in Central and Eastern Europe, while the financial crisis has taken a particularly heavy toll, Swiss Re is upbeat about future prospects. “In these markets we anticipate seeing exceptionally promising business opportunities and growth potential in the long term,” he added.