Already a Bloomberg.com user?
Sign in with the same account.
Munich Re said it expects to increase the firm’s industry-insurance business, which offers insurance and reinsurance for corporate clients.
“We have shown that we can achieve profitable growth in the business at a low double-digit percentage range over the cycle,” August Proebstl, head of the company’s Corporate Insurance Partner unit, said in an interview in Munich. “Over the last five years our compound annual growth rate was almost 13 percent.” The business doesn’t have a specific growth target, he said.
The division of Munich Re, the world’s biggest reinsurer, has 235 employees and recorded premium income of about 525 million euros ($679 million) in 2011. It expects to increase that to about 600 million euros this year. The unit focuses on corporations with revenue in excess of 500 million euros and offers broker-driven industrial insurance business as well as reinsurance of large companies’ in-house insurance ventures, Proebstl said.
“While the nature of the business is highly volatile as insured values are rather high, we believe we can meet the group’s overall profitability requirement of 15 percent return on risk-adjusted capital,” Proebstl said. While the last two years haven’t been profitable because of large claims, “2012 seems to be developing as a good year,” he said.
In 2010, the Munich Re unit had its biggest natural- catastrophe loss “of the more recent years” when the Chile earthquake cost it close to 100 million euros, mainly driven by a single loss of a large corporate customer, Proebstl said.
“As a comparison, last year’s Thai floods, where our losses were spread over a larger number of claims as a blend of property damage, business interruption and contingent business interruption losses, cost us half of that,” he said.
Munich Re is competing in the area with major industrial insurers such as Allianz SE’s Allianz Global Corporate & Specialty unit, Zurich Insurance Group AG, Talanx AG, American International Group Inc.’s Chartis division as well as with reinsurers such as Zurich-based Swiss Re Ltd. (SREN)
Swiss Re, the world’s second-biggest reinsurer, has said it plans to double its corporate-solutions business by 2015 from $2.6 billion in gross premiums in 2011 to $4 billion to $5 billion. Reinsurers help primary insurers shoulder risks for clients.
Munich Re’s industrial-insurance business doesn’t handle coverage for aviation, space and credit risks as those are offered by the company’s special and financial risks unit.
To contact the reporter on this story: Oliver Suess in Munich at firstname.lastname@example.org
To contact the editors responsible for this story: Frank Connelly at email@example.com Edward Evans at firstname.lastname@example.org