Munich Re expects stable property rates

Munich Re, the world’s biggest reinsurer, says it expects stable rates for its property and casualty reinsurance at January price negotiations.

“Prices will remain largely stable, chiefly due to the still comparatively low interest rates,” for proportional business in which a quota of claims and premiums is shared with a primary insurer, the company said.

The Munich-based company “predicts no significant changes in prices and conditions” in other business, it said.

Reinsurers such as Munich Re, Swiss Re Ltd and Hannover Re are meeting with brokers and their clients, primary insurers, in Monte Carlo to negotiate terms and conditions of next year’s property and casualty policies.

The industry is under pressure to shore up earnings hurt by low interest rates and as near-record capital available for coverage weighs on prices.

Executives from Allianz Re, the reinsurance arm of Germany’s Allianz SE, and the international reinsurance business of Berkshire Hathaway Inc. said on Sept 6 they expect prices to be unchanged or even fall slightly next year.

The reinsurance industry had capital of $510bn at the end of June, just below a record $515bn three months earlier.&