Zero appetite to weaken terms & conditions, reduce attachments: Munich Re CFO

There is zero appetite at reinsurance giant Munich Re to budge on attachment points or weaken any terms and conditions, the firm’s CFO Christoph Jurecka explained today.

As we reported this morning, Munich Re had a very strong first-quarter to 2024 and said that April reinsurance renewals were positive in terms of volumes, but flatter in terms of rates.

The company also said it anticipates positive renewals at the mid-year, despite a recognition that market pressure is rising in the reinsurance space.

Asked during an investor call this morning whether Munich Re expects any pressure on its terms, in particular whether it foresees any decline in reinsurance contract attachment points, the firm’s CFO Christoph Jurecka said there is zero chance.

Instead, the company is hoping for a stable outlook in reinsurance through 2024, on both price and terms.

That means no loosening of underwriting terms and conditions, on which Jurecka was very clear.

In response to an investment analysts question about whether Munich Re would consider reducing attachment points for its clients, Jurecka said, “Lower attachment points, or these kinds of things, is clearly nothing we would want to go into.”

He went on to explain that Munich Re would, “Rather really focus on maintaining the improved terms and conditions and then continuing to write business at the attractive price level, of where we currently are.”

Commenting on the stabilisation of the reinsurance price environment , Jurecka said, “It seems as if we are on a plateau level for 1-1 and 1-4 now, from a pricing perspective, where supply and demand met each other at very reasonable terms.”

Adding that, looking forwards on price expectations for renewals, “I would just assume that continues.”

Jurecka then reiterated the importance of discipline, especially on terms and conditions.

Telling the analyst, “Then again, our appetite to weaken some of our T&C’s. or to be looser on the underwriting side, the appetite is absolutely zero and the discipline needs to be maintained going forward.”