“Sudden and accidental catastrophes do not keep me awake at night,” said Nikolaus von Bomhard. “It is the ‘creeping death' scenarios that cannot be stopped overnight that give me nightmares long into the night.” Von Bomhard was speaking at this year's Munich Re press conference at the Monte-Carlo Rendez-Vous where he also outlined the reinsurance trends for 2006, highlighting the significant price increases for nat cat mipacted lines of business but stable prices across most other lines of business.
On the issue of overall pricing fluctuations, Von Bomhard was of the opinion that there had been a general firming up of prices around the world, particularly in the US, and expressed concern at the massive rate hikes experienced in January and July this year.
Looking ahead to 2007 renewals, he predicted a very tight retrocession and cat bond market, particularly for US scenarios, and was adament that risk-adequate prices, terms and conditions in areas not exposed to nat cat losses remain the key to sustained profitability and performance.
Turning to the current health of Munich Re, von Bomhard responded to a question regarding the issue of over-capitalisation by pointing out that Munich Re liked to sustain a "buffer of at least €1bn", and that the reinsurer "would always pursue an ‘AA' rating over a buy-back of shares". He expanded on the company's portfolio shift, explaining that the regional shift towards the Asia market was indicative of the freer market conditions there.
On the subject of the potential acquisition of Scottish Re by the reinsurance giant, Von Bomhard said that the life reinsurer was not a target, stating that, “We are not interested in the company or their book”. He added also that the Swiss Re/ GE Insurance Solutions deal “has not had any consequences or loss on our new business”. However, in response to question concernnig Munich Re's potential acquisition card, he replied, “We don't need to make any acquisitions at the moment but we will not abstain if something of the right size and price came along.”
