Renewals and pricing, natural catastrophes and cyberwar are all discussed in a recent webcast and note published by Munich Re, entitled Series of billion-euro market losses due to natural catastrophes in Europe.
In the discussion, the company says natural event activity, inflation, geopolitical and civil unrest are all uncertainties which call for disciplined underwriting. The company says it is in a position to grow its risk-bearing capacity in Europe. It also says it will be adding cyber war exclusion clauses to original policies.
“We are willing to expand our risk partnerships with our clients,” states Clarisse Kopff, Munich Re board of management member responsible for the company’s Europe and Latin America division. Discussing the series of natural catastrophe losses exceeding the 1-billion-euro mark (seven in 2023 so far, up from five in 2022 and four in 2021), they add that “Munich Re is able to allocate additional capacities for natural catastrophes and other types of risks, provided that appropriate prices, terms and conditions can be achieved.”
Regarding inflation, it says higher prices for replacement car parts, higher construction costs and wage increases will all factor into future deliberations. “Inflation will remain a key feature in pricing,” they write.
Finally, the demand for cyber risk coverage remains high, they say, adding that Europe is the second-largest cyber insurance market after North America. Minimum standards for cyber security, the company’s underwriting approach and accumulation potential are all discussed in the commentary.
“In order for the cyber market to enjoy sustainable growth, certain fundamental conditions have to be clarified. First of all, it is vital that we arrive at a better understanding of accumulation potentials, meaning losses that can affect not just one insured party, but major portions of the business insured simultaneously,” they state. “Munich Re’s aim is to add adequate cyber war exclusion clauses to original policies.”