Speaking at the reinsurance giants annual general meeting this morning, Munich Re CEO Joachim Wenning noted that while the ultimate cost of the Covid-19 pandemic would be “substantial” he expects that for the reinsurer this will be manageable and the company may benefit from opportunities as well.
For Munich Re, this annual meeting proved a landmark in the history of the 140 year old reinsurance company. It was the first time in its history that the meeting was held virtually, given the inability to convene in person during the global pandemic.
“Although we cannot yet foresee the exact effects of the coronavirus at this time, one thing is certain: our Group is in a solid economic position. The probable short- and long-term costs of the pandemic are substantial. But for Munich Re, these will stay financially well manageable,” Wenning explained.
In fact, Wenning believes that for Munich Re the pandemic will not prove a hindrance to its business objectives, as he expects the company will only become stronger in this challenging environment.
He continued, “Munich Re’s capitalisation remains very solid. With our strong balance sheet, we remain a reliable partner to our clients. We are furthermore confident of emerging relatively stronger from the coronavirus crisis and of being able to avail of the opportunities likely to arise.”
Reinsurance firms with the scale and broad diversification of Munich Re are few in number and so a global crisis like Covid-19 could present them with a chance to further impress on clients their important role in helping provide continuity and protection.
But still, Wenning does not feel that the insurance and reinsurance industry should protect its clients at any cost, especially when that protection was not envisaged in the first place.
He said he opposes political views that re/insurers should take on liability for the pandemic-related costs of businesses and private individuals even if their policies explicitly or implicitly exclude such coverage.
“Reliability is a virtue Munich Re holds very highly,” Wenning said.
But adding that, “There are things which we too must be able to rely upon, including the rule of law.
“Retroactive intervention in contracts is incompatible with the principles of the rule of law, and would severely damage the foundations of insurance and hence its benefits to progress and growth.
“We are relying on governments not to call these fundamental principles into question.”