"It is not our intention to exit the Israeli insurance market. We are, to the contrary, very much interested to broaden the scope of our activity in Israel," Munich RE chief executive Israel Hans Hornisch told "Globes".
Hornisch noted, "We are in talks with the Israeli government on an Earthquake Disaster Recovery Plan. This shows again our elevated interest in the country and its economy."
A few days ago, "Globes" reported that Munich RE AG (DAX: MUV) was substantially reducing its reinsurance activity in the Israeli market, and that it had stopped provided reinsurance for medical malpractice.
Hornisch confirmed, however, that Munich RE had substantially reduced its activity in Israel. "It is, however, true, that we have substantially reduced our involvement in insurance business which is, according to our assessment, either not correctly priced or not treated in a technical manner. The fierce competition between insurance companies in Israel led in some areas to terms and conditions which we are neither willing nor able to accompany."
Hornisch added, "We believe that the financial market crisis with its implications on insurers and reinsurers must and will lead to increases of insurance and reinsurance prices as well as to more reasonable contract features. Our underwriting will remain profit-oriented and we will accept risks only on the basis of sound prices and conditions."
Hornisch stated, nevertheless, "We have already last year decided to shift our complete Israeli replicating portfolio from US dollars to Israeli shekels, which implies an investment of about $500 million in shekels. Again, this shows our interest in a longstanding relationship with the Israeli insurance market."
Published by Globes [online], Israel business news - www.globes-online.com - on November 13, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008