Munich Re’s Hauer: Reinsurance market “delicately balanced” ahead of 1.1 renewals
Munich Re’s recently appointed non-life head for Southeast Asia has described reinsurance market conditions as “delicately balanced” in the run-up to 1.1, reiterating the need for rates and conditions to remain risk-adequate.
Speaking to The Insurer ahead of this week’s Singapore International Reinsurance Conference, Michael Hauer said he did not expect any major shift in market conditions at upcoming renewals.
“I cannot detect anything material that would point to a sudden end of the current market conditions – especially when taking the recent Hurricane Milton in the US and typhoons Yagi and Carina in Asia into consideration,” Hauer said.
“General conditions and changing risks require a disciplined approach and precise risk management, and that is broadly being recognised.”
Hauer pointed to ongoing uncertainties such as high claims inflation and the significant downside risks hanging over the overall economic environment.
“At the same time, global insured nat cat losses continue to be on the rise. So the market environment remains challenging and potential future significant losses, like Milton, could impact its delicate balance. For Munich Re, it is of utmost importance that rates and conditions are risk-adequate to ensure the sustainability of the business.”
Hauer began his new role last month having previously served as CEO of Munich Re’s Korea branch. His appointment was part of a broader restructure across Asia, the Middle East and Africa.
“The goal of the new set-up is to further strengthen our local underwriting teams. As our teams have grown and deepened their expertise and client relationships in the markets, we have empowered them to make more underwriting decisions on-site,” Hauer said.
He added that Munich Re currently sees good growth opportunities across almost all segments and markets within the Southeast Asia region.
“In many Southeast Asian countries, insurance penetration still remains low, and there is significant potential for product diversification. Additionally, there is a substantial protection gap in regard to natural catastrophe perils,” he said.
“This not only necessitates support for the development of the market but it also presents numerous opportunities for the insurance and reinsurance industry.
“However, Munich Re’s focus is not on growth per se, but on profitable, sustainable business relationships with our clients. For me, maintaining underwriting discipline is paramount. We do not want to grow into business which is not priced risk-adequately.”