Annual Report 1997/1998 - Munich Re

Munich Re Topical subjects
The euro
Engine of growth
60
or risk factor?
The euro – engine of growth or risk
factor?
What was still a subject of vigorous
public debate only a matter of months
ago is now a certainty: this May’s
decision means the euro is coming –
and at an earlier date and in more
countries than many commentators
originally considered possible. Munich
Re welcomes this development. Like
most of the insurers in the markets
concerned, we see it as an important
step for the future.
In the countries that will be
participating in EMU, we write
approximately 69% of the Group’s
gross premiums and around 62% of
the parent company’s. Thus the area
involved is a very significant business
region for us. We will accompany our
clients in these countries individually
in the changeover to the euro, right
from the start and in line with their
own plans. This applies not only to
new business but also to existing
reinsurance contracts.
We have been preparing ourselves
intensively for monetary union in a
special long-term project, which will
enable us to process our external
business in euros from 1st January
1999. Clients will then be able to avail
themselves of this option as soon as
they wish. We will start publishing our
company and consolidated accounts in
euros for the year 1999. We want to
have our own internal systems fully
converted to the euro by the end of
2000. A large number of the necessary
IT modifications will be taken care of
in the general conversion of our IT to
client-server systems, which is currently
taking place.
The business press has repeatedly
brought up the question of whether the
changeover to the new currency may be
exploited as an opportunity to terminate
longer-term contracts on the grounds
of a change in their implicit basis. Our
clients can count on us not raising this
issue.