According to a statement by the reinsurer there has been a steady rise in weather-related natural catastrophes during recent decades and, taking inflation into account, economic losses in the past 10 years have more than doubled compared with the 1980s. Insured losses have risen by a factor of 2.5, according to the company’s statement.
Munich Re at the briefing presented tools it has developed to give clients the means to assess the risks and prepare natural catastrophe analyses for individual portfolios.
Munich Re's CatLossEstimation Service allows it to create a forecast of losses affecting client portfolios shortly after a severe weather loss has occurred, which significantly improves claims management, the company said. However, this assumes, that portfolio data are submitted in a form that can be processed by geographical information systems.
"For years we have been pushing for greater transparency of insured risks," said Ludger Arnoldussen, member of Munich Re's board of management in the statement. "This is the only way to ensure that the risks are correctly assessed, that accumulation controls are performed, and that efficient risk management is achieved."
In addition to prices, terms and conditions, the quality of the portfolio data will again be on the agenda in the current renewal round for property-casualty treaties, Munich Re noted. The more precise the information on the risks covered, the more accurately those risks can be assessed, the company said.
"A high degree of transparency in connection with risks makes it easier for insurers and reinsurers to set risk-adequate premiums," Mr. Arnoldussen said. "In the present January 1 renewals, as in the past, we are asking for what we consider an appropriate price for the risks we write. If we are unable to achieve that price in a particular area, we will use our capital in other areas that provide a satisfactory return.”
"At the same time, we will firmly support the trend towards differentiation in the price paid for reinsurance on the basis of the credit standing of the reinsurer and the service it provides," he added.