Joachim Wenning, CEO of Munich Re, one of the world's largest reinsurers, has dismissed calls for price reductions in the area of natural catastrophe insurance as "nonsense". In an interview with the Financial Times, Wenning argued that the price increases are a response to rising costs and that the industry is simply reacting to market developments.

In recent years, prices for reinsurance have significantly increased due to rising damages from natural disasters such as storms and wildfires. This has led to a considerable burden for many consumers and businesses in securing their properties. Munich Re itself reported record profits in the first half of 2023, which is partly attributable to the rising premiums for insurance coverage in the real estate sector. The company currently has a market capitalization of 65 billion euros.

Wenning rejected the criticism that reinsurers should lower prices to reduce the pressure on policyholders. "When the market cycle is softer, I never hear that reinsurers should get more because they are not earning enough," he explained. This discussion is one-sided and unfounded.

Furthermore, he emphasized that the increased costs of reinsurance in disaster-prone areas are due to the growing risks caused by climate change. "It is becoming more difficult for businesses and households to insure against natural disasters because coverage is becoming more expensive," said Wenning. "It is not impossible, but it is becoming more costly.

In the face of growing challenges, some politicians suggest that public-private partnerships could bear part of the financial burden. However, Wenning warned that such programs must be designed carefully to avoid price distortions. "If you live in a high-risk area, you should pay more," he argued. Socializing the risks would reduce the incentives for risk minimization and increase future losses.

Despite rising costs, Munich Re has a strong financial base. The company's solvency ratio was 287 percent in the first half of the year, well above the target range of 175 to 220 percent. This indicates that the company has significant capital that it could use for further investments. According to Wenning, the possibility of mergers and acquisitions in areas such as US specialty insurance or the expansion of the primary insurance brand Ergo should also be considered. Deals in the range of one to five billion euros are realistic.

The concluding remark by Wenning expressed concern about the threat of a large-scale cyberattack. Public-private partnerships could also play an important role here, as the market is currently unable to provide sufficient insurance coverage for such risks.