In Monte Carlo today at the Rendez-vous event, senior executives of global reinsurance firm Munich Re explained that they see the trend for some longer-tailed casualty focused sidecars to offer high returns from the asset side as “not a good idea” while the potential for commutation discussions to prove a challenge at the end of a sidecar term was also discussed.
Munich Re hosted a media briefing in Monte Carlo and Thomas Blunck and Stefan Golling, both members of the board of management, seem equally against sidecars that have a significant focus on generating returns from the investment side, as well as on those targeting U.S casualty or liability risks.
Blunck, who has oversight of Munich Re’s reinsurance division at the board level, commented first, “Another element that I’d like to pinpoint is some of the solutions, for example sidecars that we’re seeing in the alternative space, are taking obviously more asset risk. Not all of them.
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