According to Allianz, property-casualty insurance costs will rise in the Asia-Pacific region following the recent floods and earthquakes there, though the impact on global pricing remains unclear.
“The cost of property-catastrophe cover will go up, probably quite considerably in the affected zones, and that will then factor into the retail prices in those areas,” Allianz board member Clement Booth, told CNBC TV in an interview on Friday.
“Whether that has a worldwide impact is hard to say at this stage because we don’t yet have a final market number for the Christchurch earthquake or for Japan,” said Booth, who is in charge of global insurance lines at Europe’s biggest insurer. Insurers faced a “freak quarter,” in the first three months of the year, with costly floods and a cyclone in Australia, an earthquake in Christchurch, New Zealand, and last month’s devastating earthquake and tsunami in Japan.
“These events will cause upward pressure on reinsurance pricing, and reinsurance pricing is a component of what we pass on to our consumers,” Booth said.
However, the insurance industry as a whole was resilient enough to handle the costs of the disasters, which in Japan alone may cost insurers up to $30 billion, by some estimates.
“Taken over a longer period of time, it is still within the ability of the insurance industry to deal with,” Booth said.
Allianz was not “on an acquisition trail” in property-casualty segment and instead was focused on organic growth, particularly in Asia and the United States, Booth said.
Source : Reuters
