Reinsurer Munich Re eyes hike in premiums as business booms

Munich Re, the world's biggest reinsurer, said premiums will increase this year as primary insurers hurt by the financial crisis take out reinsurance contracts to bolster capital.

"The financial crisis is opening up new opportunities for us," said Joachim Wenning, management board member. "Numerous insurers are currently short of capital and selling new shares or raising debt has become very expensive, so reinsurance is a competitive alternative to replenish capital."

The company closed nine so-called capital-relief transactions this year, which may add more than 2 billion euros ($2.7 billion) to gross premiums annually, or about 40 percent of last year's life reinsurance premiums. The new large-volume contracts helped Munich Re increase its forecast for this year's gross premium income to as much as 41 billion euros.