At the Les Rendez-Vous des Septembre, Munich Reinsurance Company Chairman of the Reinsurance Committee Torsten Jeworrek indicated that global governments should not rely on reinsurers to fill in capacity gaps should they decide not to back state terrorism insurance pools. Of particular concern is the German government's recent decision to not extend its 8 billion euro guarantee for the EXTREMUS Versicherung A.G. national terror insurance pool. German insurance market insiders are hopeful the German government will change its mind once the U.S. federal government extends its own terrorism insurance pool. Jeworrek said, "We will continue to make use of our flexibility and creativity to find solutions for complex risk situations. However, risk-adequate prices, terms and conditions are a prerequisite for complex risk maintaining stable income and financial strength over the long term, and in the interests of our clients, shareholders and staff." Other participants at the meeting agreed the private terrorism risk market did not have enough capacity to stave off risks related to those events without high premium levels; and in many cases, private insurance capacity for terrorism risks would be inconsistent.
Source: Business Insurance**http://www.businessinsurance.com/cgi-bin/news.pl?newsId=11066
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