Munich Re To Hike Cyber Cover Prices In Germany & Europe

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Munich Re To Hike Cyber Cover Prices In Germany & Europe

According to Claudia Hasse, Chief Executive Manager at Munich Re, the company intends to raise cover premiums in Germany and Europe given the accumulation potential it sees in cyber re/insurance.

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Prior to the Baden-Baden re/insurance meeting, Hasse, who oversees non-life business in Germany, cyber business in Europe and Latin America, and the German Pharmapool, noted in a brief that Munich Re estimates the European cyber market has increased from €400 million to €2 billion over the last five years.

Our market share in Europe varies significantly by nation, from 5% in some to over 20% in Germany, the author notes.

Cyber in Europe is a profitable business, says Hasse, adding that Munich Re’s combined ratio worldwide is at around 85%.

Munich Re To Hike Cyber Cover Prices In Germany & Europe

She notes that in Europe, “It is a notch higher and that is driven by a few large single losses and by the overall lower-rate level compared to, for example, the US.

“For Germany, currently combined ratios are very high, way over 100%, are reported for the market. In our portfolio, we see an increase in losses, but not to the same extent.”

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Munich Re adds that there are two reasons for this out-performance. the first being that it chooses its partnerships very consciously, and the second being the firm supports its clients with all of its know-how in pricing, wording, and risk assessment, and it also helps them provide pre-and post-incident services.

Additionally, Hasse notes in the brief that there are clear limits to the insurability of cyber, adding that Systemic risks like critical infrastructure or war cannot be insured.

Munich Re To Hike Cyber Cover Prices In Germany & Europe

She comments, “it’s really important to understand that war is excluded already right now in our wordings.”

Hasse adds, “The goal of the current discussion is to make this exclusion more reflective of particular cyber warfare circumstances for the London market clauses have been developed already with Munich Re participation and those clauses are currently being adapted to the individual European markets, and will then be implemented. This is important to create confidence regarding cyber so that new capital, especially from the capital markets, is ready to come in.”

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She notes that given the loss trends and the accumulation potential Munich Re sees in cyber, the firm will increase its technical price in Germany and Europe, concluding, “Overall, we are very confident that our strategy is the right one and we plan to further grow in cyber in Europe.”

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