Share on Facebook Share on Twitter Share on Google+ Share on Linkedin WRIN.tv spoke with Munich Re America’s Michael Quigley, Head of Property Underwriting, and Stephan Hochburger, SVP & Client Executive, about threats and opportunities in insurance and reinsurance. In the current environment, Mr. Hochburger sees the biggest threat to insurers and reinsurers low interest rates and excess capital, as well as lower reserve levels. “Digitalization” is a new threat, but it is also an opportunity. It affects the way we sell risk, assess risk, underwrite risk. Focusing on loss costs, Mr. Quigley notes that auto insurance is getting the most attention. More miles are being driven and there are new technologies in vehicles affecting frequency and severity. Certain segments of the property market are also being affected, such as Florida. Loss costs are focused in certain lines, but will drive pricing as a result of those trends. Losses on the primary side have led to an increase in demand for quota share reinsurance in auto business. The trends affecting reinsurance pricing start with the low interest rate environment, which has a direct impact on the underwriting process at the primary and reinsurance level. Mr. Hochburger sees an uptick in demand for reinsurance, retentions are going down. The trend is fueled by low interest rates. He also sees opportunity in loss portfolio transfer for adverse loss development covers. Reinsurance is also being viewed more as a capital optimization vehicle. Lastly, Mr. Hochburger says Munich Re is looking to push the boundaries of insurance. He points to recent inland flood product as examples. He says commercial flood products are on their way.