Munich Re, the world’s biggest reinsurer, said rates in Germany need to rise following this year’s floods and hailstorms.
“It just took another 10 years to see another centennial flood in Germany,” management board member Ludger Arnoldussen said at a press conference in Baden-Baden, Germany, today. “The first rate increases in homeowner insurance are visible as premium rates need to be adjusted to reflect the natural catastrophe exposure covered.”
Motor insurance prices in Germany still don’t reflect risks, Arnoldussen said. Homeowners and motor insurance were the most affected by this year’s floods and hailstorms, he said. Floods and hailstorms added to insured market losses of $8 billion in Europe in the first nine months of the year, above the $6 billion 10-year average, Munich Re said. Reinsurers help primary carriers such as Allianz SE and Talanx AG cover risks in return for a share of the premiums.
Munich Re reported on Aug. 6 that second-quarter profit fell 35 percent to 529 million euros ($723 million), missing analysts’ estimates, as claims from natural disasters rose.
The company’s claims from the June floods in central Europe were about 230 million euros, it has said. Hailstorms that hit parts of Germany at the end of July are expected to cost Munich Re 180 million euros, Munich Re said on Sept. 8.
Both claims estimates are still accurate, Arnoldussen said today, adding that claims from hailstorms in June and August are expected to be significantly lower than those the reinsurer faced in July. Detailed figures will be given when Munich Re reports third-quarter earnings on Nov. 7, he said.
With the use of an increasing number of solar panels and energy efficient building materials, the damage from this year’s hailstorms was higher than in the past, Arnoldussen said.
Reinsurers including Munich Re and Hannover Re are meeting brokers and primary insurers this week in Baden-Baden to renegotiate terms and conditions of contracts due for renewal in January. That follows talks in Monte Carlo in September.
–Editors: Steve Bailey, Keith Campbell