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Munich Re chief executive officer Nikolaus von Bomhard expects an industry-wide decline of reserves to drive reinsurance capacity down and help prices to stabilise or rebound.
Large catastrophes have in the recent past not had a significant effect on prices, von Bomhard said during the media conference for the reinsurer’s second quarter results. “It could be that a combination of unlucky or lucky factors suddenly exerts pressure on the market, but that’s not what I expect. The decisive factor will be the reserves,” he said.
Not only management, but also the supervisory board gets nervous if reserves reach low levels, and von Bomhard pointed to the “great reserve crisis” just after the turn of the century. “As the reserves turned really scarce, the market experienced a fundamental shift,” he said.
Munich Re released reserves in the amount of around €230 million in the second quarter of this year, corresponding to 5.1 percentage points of its combined ratio as claims notifications for "basic losses" from prior years remained appreciably below the expected level overall.
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Munich Re, Munich, Results, Nikolaus von Bomhard, Torsten Jeworrek, Reinsurance,