Munich Re says damage inflation rising much faster than CPI rate

German major reinsurer, Munich Re announced on Sunday that it will seek higher reinsurance rates as costs for insured damages are outpacing overall consumer prices.

“Damage inflation is significantly higher (than overall inflation) in many reinsurance segments,” management board member Thomas Blunck noted in a statement on the ‘Rendez-Vous de Septembre’ industry meeting in Monte Carlo.

Blunck cited factors such as increased legal claims in the United States, rising costs of medical treatments, and shortages of construction materials and skilled workers as contributing to this trend.

In response to these rising costs, Munich Re will insist on adequate reinsurance rates and contract terms to ensure profitability.

“Munich Re will continue to be mindful of adequate reinsurance rates and contract terms,” Blunck further said.

Attribution: Reuters