.... The Realities of Life After CatClaims.
Munich Re posted an informative Press Release dated 7 November 2006. Here is a link to it: Munich Re Press Release "7 November 2006". It says a lot. Some translation is probably required, and not just from German.
The Munich Re Group is reported to have posted a record profit in 2005, the highest in the Group's 126 year history. The results for just the Property-Casualty sector of Munich Re for the first 9 months of 2006 are similarly encouraging news, Munich Re reports. Its Property-Casualty reinsurance premium "grew slightly" to 11.0 billion Euros, or "10.9bn", and its combined ratio in that area (percent of claims paid vs. premiums collected, in basic terms) "came to an excellent 92.1%". The number of "major losses" from weather- and other nature-caused catastrophes was "below average" and Munich Re was "largely spared major losses" from such CatClaims in the first three quarters or nine months of 2006.
All is not good news, however, for some. The current absence of Hurricanes should not cause any loss of memory of the "severe tropical cyclones" that caused major CatClaims in 2004 and 2005, according to this message. The predicted "loss potential" is what counts for pricing premiums and setting the terms and conditions of Munich Re's reinsurance policies for Property and Casualty Insurers.
Munich Re's Press Release contains this candid assessment: "In the light of the general increase in risk awareness and the considerable upward revision of the loss potential, it proved possible to implement the necessary substantial price increases." In other words, there is a greater awareness of the risk of Hurricanes and other natural disasters because they happen to a lot more people a lot more often, resulting in greater losses, so that reinsurers must, says Munich Re, and will charge "substantial price increases."
Munich Re's Press Release also informs that "in the USA and Latin America," the focus for renewal of reinsurance for the coming year, other than for Life Insurers, involves oil rigs and other Property risks exposed to CatClaims.
REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.
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