Munich Re CEO anticipates strong 1/1 2025 reinsurance renewals

Global reinsurer Munich Re is confident that favourable market conditions will persist at the January 1st, 2025, renewals, as the firm sees continued strong demand from buyers and discipline from sellers, according to CEO, Joachim Wenning.

“Looking at the factors that drive reinsurance rates, I cannot detect anything material that would point to a sudden end of the favourable market conditions,” said Wenning during an earnings call this morning with analysts and the media.

He reiterated that Munich Re does not expect a softening of the global reinsurance market. Instead, strong demand from customers is expected to persist as they assume more risk due to inflation and growth.

While Wenning is confident that the outlook for the January 1, 2025, renewals is very positive, he noted, “there are always some pockets that you can find which are not really hard, or where the margins are not attractive. Take D&O, for example, even cyber was recently not hard, but was slightly softening.”

He added, “So, I can find pockets, but broadly, the market is very disciplined, the reinsurers are disciplined, they have to earn what they couldn’t for a long time, catching up to the profits their clients have been earning.”

Wenning also discussed pricing in lower layers, which he described as currently unattractive for reinsurers. He noted that if these layers were to be reinsured, rates would need to rise.

Summarising pricing across different layers, Wenning said, “There are top-layers, mid-layers, low-layers. The top-layers have been priced attractive, and they are under a little bit of more pressure at these times. The mid-layers are very stable, if not positive, in their development. And the lower layers are those that the reinsurance industry, or we are less engaged in, or not engaged in, they fall into the retention of the direct writers.”

This morning, Munich Re released a very strong set of results for the second quarter and first half of 2024.

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