Christoph Jurecka, Chief Financial Officer (CFO) of global reinsurance company Munich Re, said today that while it’s still early days, the firm is optimistic ahead of the key mid-year reinsurance renewals as pricing remains attractive despite some softening so far in 2025, while the firm still sees the US property catastrophe space as a growth area.
After releasing a solid set of first quarter 2025 results despite the costly wildfires in California in January, Munich Re held an earnings call with analysts during which the upcoming mid-year renewals were discussed by the company’s CFO.
He emphasised that it is still early days and that the specificity of the Japan-focused April renewals makes it difficult to draw any conclusions from 1.4 to the mid-year, even more so given the LA wildfires are far from Japan and significantly closer to the US business up for renewal in June and July.
“As mentioned in my introductory remarks, if you look at 1.1 and 1.4 together, the price decline is less than 1% for us so far, which means that we are still in very attractive territory, and margins are attractive. And this has to be kept in mind also when we look about volume, because obviously there’s a client relationship, and we want to serve and will serve our clients also going forward,” said Jurecka.
Adding: “And just to highlight a bit of how the process works, it’s not like that ahead of the renewal we sit together and discuss a question like you asked, how much compromise are we willing to make top down? But it really depends on the discussions with the clients, how clients react also, the overall client relationship, how long standing is it? How profitable is it overall? And all these discussions always go beyond single treaties and single renewals, obviously.
“So, therefore, I think I can only summarise that we continue to be optimistic for 1.6 and 1.7 that the markets will continue to be attractive for us and will allow us to also generate attractive margins out of our business going forward. Based on the very attractive starting point where we’re at, and also based on what we saw, particularly at 1.1, a bit less so in 1.4, which as mentioned, was very specific.”
In terms of pricing levels, the CFO stressed that it continues to be very attractive despite the slight softening seen so far this year in the property space.
“It is all risk-adjusted, so in these price change numbers, as we interpret them and as we communicate them, the change in exposure, but also the change in the risk, for example, due to climate change model updates and all these kind of things, is all included in there already. So, you have to also keep that in mind,” he said.
During the call, Jurecka was also questioned on whether Munich Re still views the US property catastrophe sector as a growth area.
“US property growth, absolutely,” said Jurecka. “If the business meets our requirements when it comes to terms and conditions, but also price, of course, we are prepared to grow that business. It’s a healthy business, generally, and as discussed earlier today, the margins are still in a very attractive place, generally spoken. Now it will depend on the renewals, and also how the LA wildfire will impact those renewals in 1.6 and 1.7. But yes, generally, we are absolutely prepared to grow in that area as well.”
