Munich Re, Swiss Re May Struggle to Increase Rates
Munich Re and Swiss Reinsurance Co., the world’s largest reinsurers, may struggle to raise prices for property and casualty coverage next year as an absence of costly disasters and a stock-market rebound restrain demand.
Reinsurers, which help insurers such as Allianz SE shoulder risks, gather in Monte Carlo starting tomorrow to begin talks with customers over January contract renewals. Discussions will continue at an October meeting in Baden-Baden, Germany.
In the Atlantic hurricane season, which runs from June to November and can drive reinsurance rates, no major storm has hit the U.S. coast so far this year. In 2008, Hurricane Ike slammed into Texas in September, costing the insurance industry $20 billion and helping push up reinsurance rates by about 8 percent this year following a two-year decline.
“Reinsurers will find it hard to argue for major rate increases next year as the 2009 hurricane season has been extremely quiet,” said Markus Engels, who helps manage about $440 billion at Allianz Global Investors. “I would expect stable or slightly higher prices next year.”>>>MORE