After a first-quarter and April reinsurance renewals of growth, global player Munich Re now says the chance it surpasses its full-year guidance for 2023 has increased.
Munich Re grew its property and casualty reinsurance book by some 13% in the first-quarter of 2023 and then grew its April renewals book by a further 11.1%, the company reported this morning.
Expansion into non-proportional, so excess-of-loss, catastrophe reinsurance business was a particular feature of the reinsurers growth so far this year, it seems.
With Munich Re saying “Non-proportional natural catastrophe business was expanded, in particular, in view of attractive rate levels.”
The net result across Munich Re for the first-quarter declined slightly to EUR 1.271 billion, down from EUR 1.48 billion in the prior year.
An above-average level of catastrophe loss events elevated the P&C reinsurance combined ratio to 86.5%, slightly above budget, where as the prior year had seen particularly low large loss activity, the company explained.
P&C reinsurance delivered a net result of EUR 760 million, down from the prior year’s EUR 958 million.
But revenues and premium growth were up significantly and at the same time Munich Re is benefiting from the improved rate environment in reinsurance.
Price development was positive at reinsurance renewals, Munich Re explained, with rate acceleration more than compensating for higher loss estimates in some areas.
“To varying degrees, price increases were evident around the world. All in all, prices for the Munich Re portfolio increased by 4.7%,” the reinsurer explained.
Major loss activity reached EUR 1.035 billion for the quarter, up on the previous years EUR 618 million.
Man-made major losses were down slightly at EUR 165 million, but natural catastrophe losses in Q1 rose to EUR 870 million, with the earthquake in Turkey a major contributor at EUR 600 million, so the overall cat burden was nearly double the previous year figure of EUR 448 million.
Looking ahead, Munich Re is anticipating a strong opportunity for continued expansion, it seems.
The company explained that it, “expects the market environment to remain positive and to present attractive growth opportunities in the upcoming July renewal rounds.”
Christoph Jurecka, Munich Re CFO, commented on the results, saying, “The earthquake that hit Turkey on the border with Syria in February 2023 was one of the most catastrophic we have seen in recent history. Around 60,000 people lost their lives. The insured losses amount to some €4–5bn, of which Munich Re is shouldering €0.6bn – one of the reasons why major losses from natural catastrophes in Q1 2023 were higher than expected.
“Owing to otherwise pleasing operational performance and a strong investment result, however, Munich Re generated a net result of almost €1.3bn. In addition, the April renewals saw Munich Re continue its trend of profitable growth.
“Accordingly, we are confident that we can reach our 2023 net result guidance of €4bn; the chances for us to surpass this target have increased.”
As a reminder, Munich Re has just today closed on a new catastrophe bond, which increased in size significantly while being marketed and has become the biggest cat bond the reinsurer has ever sponsored.
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