Munich Re forecasts 98% combined ratio in p&c reinsurance in 2016, appoints Wenning as new CEO

Munich Re said Wednesday it expects its combined ratio in property & casualty reinsurance will deteriorate more than eight points this year, due in part to low catastrophe losses in 2015.

In a press release Wednesday Munich Re, said in P&C reinsurance, is “aiming for a combined ratio of around 98% of net earned premiums in 2016, taking account of the relatively low incidence of major losses until February.”

The combined ratio for 2015 was 89.7%.

 

“The increase of more than 8 percentage points on the ratio achieved in 2015 is mainly due to the fact that 2015 saw randomly fewer major losses from natural catastrophes than expected, and that loss reserves for prior accident years were released on a large scale,” Munich Re said of its forecast for this year.

In 2015, Munich Re reported its major loss expenditure in P&C reinsurance was 1.046 billion euros after retrocession and before tax. The euro was trading Wednesday at $1.48.

In February, Munich Re reported gross written premiums of 50.4 billion euros in 2015, of which 28.2 billion euros was in life and P&C reinsurance, 16.5 billion euros was from primary insurer ERGO (which writes life, health, auto, property and liability, among others) and 5.6 billion euros was from Munich Health.

In P&C reinsurance, Munich Re reported gross written premiums of 17.6 billion euros in 2015. The firm topped A.M. Best Company Inc.’s list of global reinsurance groups – released in Sept. 2, 2015 – when ranked by gross life and non life premiums written in 2014. Swiss Re, Hannover Re, Berkshire Hathaway and SCOR ranked second through fifth.

At the beginning of 2016, Munich Re “anticipated major losses in the order of around” 2 billion euros for 2016, the company reported.

In 2015, aggregated losses for natural catastrophes were 149 million euros, while losses for man-made major losses were 897 million euros. Losses included 47 million euros from flooding in Chile, 45 million euros for a major earthquake off the coast of Chile, 175 million euros from the explosion in the Chinese port of Tianjin, 156 million euros from a dam failure in Brazil, 51 million euros from a fire in a South Korean warehouse and 36 million euros from a fire at a U.S. refinery.

Munich Re announced Tuesday that Nikolaus von Bomhard (above right) will step down as chief executive officer April 27. He will be replaced by Joachim Wenning (left), director of labour relations for Munich Re. Wenning is also responsible for international life reinsurance and is on Munich Re’s board of management.

Von Bomhard joined Munich Re in 1985 and has worked as a fire/treaty underwriter, manager of the company’s São Paulo, Brazil office, among others. He was appointed chairman of the board of management in 2004. Von Bomhard will step down from the board of management next month, the company said March 15.