(Bloomberg) -- Munich Re, the world’s biggest reinsurer, said rates for property and casualty reinsurance are still being squeezed during price negotiations.
The start of talks for January renewals is dominated by “extremely low interest rates for investments,” the company said in a statement in Monte Carlo today, where negotiations are taking place. Years where losses for reinsurers were relatively low are also adding pressure on prices now, the Munich-based company said.
Reinsurers such as Munich Re, Swiss Re Ltd. and Hannover Re are meeting with brokers, their clients and primary insurers in Monte Carlo to negotiate terms and conditions for next year’s property and casualty policies. The industry faces increased competition and narrowing underwriting margins as record capital available for coverage weighs on prices.
“In standard business, we will continue to resist pricing pressures and withdraw from business if necessary,’’ said Torsten Jeworrek, who heads Munich Re’s reinsurance business. We can deploy our know-how and capacity better in offering our clients new and intelligent coverage concepts for the most diverse requirements.’’
Executives from Hannover Re and the international reinsurance business of Berkshire Hathaway Inc. said on Sept. 3 firms may struggle to halt the slide in prices amid increasing competition from new entrants such as hedge funds and absence of costly disasters.
Munich Re expects 1 percent growth in property and casualty reinsurance in each of the next three years in Europe and North America, 3 percent from the Asia-Pacific and 4 percent in Latin America.
