Market will turn: Munich Re

Munich Re, one of the biggest reinsurance companies in the world, said the current reinsurance cycle is about to turn and rates could increase significantly.

‘In view of the increased cost of capital, the growing demand and the changed risk environment, we expect significantly higher prices, with percentage increases definitely going into the double-digit range,’ said Ludger Arnoldussen, member of Munich Re’s board of management.

The current financial turmoil is increasing demand for reinsurance, said Munich Re in a statement released at the Baden-Baden renewal meeting.

‘To master the challenges connected with the financial crisis, primary insurance companies are more dependent than ever on reliable and financially resilient reinsurers as partners,” said Arnoldussen.

The statement added that in terms of market capitalization the 10 largest insurers had lost more than a quarter of their value since the Monte Carlo Rendezvous in September.