Expansion beyond Germany’s borders
“Reinsurance is international by nature.” Carl von Thieme adhered rigorously to his strategy of spreading risk through international and multi-line business. An important step was to enter the UK market. The company’s first office in London was inaugurated in 1890 and the USA followed. With its “obligatory reinsurance treaty” enabling risks to be transferred in full to the reinsurer – new in the United States – Munich Re provided its clients with a substantial competitive advantage and thus enjoyed considerable success. The decisions to open offices in London and elsewhere overseas proved to be milestones in the company’s internationalisation strategy. There were also developments on the product side. The first machinery insurance cover was introduced – this was the beginning of engineering insurance. Travel insurance also proved a success and the first motor liability claims were covered. However, at the same time the company had to contend with its first large losses: the San Francisco earthquake in 1906 has remained Munich Re’s most costly natural catastrophe loss to this day.
1890 – London office
Carl Schreiner opens the first office in London, which successfully develops its business. London proves to be a milestone in Munich Re's international development.
1890 – More shareholdings
Munich Re acquires shareholdings in Securitas Rück of Vienna, Allgemeen Brand en Waarborg-Maatschaapij and Providentia of Amsterdam, and Swiss National.
1891 – First overseas business
The first reinsurance treaties with overseas insurers are signed with four companies in Batavia, today’s Jakarta.
1892 – Entry into the USA market
Following the success achieved in London, business expands to North America. That same year, the first three fire reinsurance covers are written. When the United States makes it mandatory for companies to have a licence in 1899, Munich Re sets up a branch.
1898 – Development of machinery insurance
Munich Re works on a completely new form of insurance for machinery. Insurers and policyholders take part in developing the product. On 1 January 1900, Allianz Munich is granted a licence for Bavaria. From 1903, machinery insurance is authorised for all of Germany.
1900 – Cover available for natural hazard losses for the first time
Munich Re’s windstorm insurance provides cover for natural hazard losses for the first time.
1902 – Further shareholdings in Germany and France
Munich Re acquires shareholdings in Germanic Lloyd Berlin, Assecuranz Compagnie Mercur, the German life insurance bank Arminia, and Réunion Française – its first shareholding in France.
1904 – The first large loss
The Great Baltimore Fire. Though Munich Re has to pay out four million marks, the offices in London and the USA still produce a profit of 900,000 marks.
1906 – The San Francisco earthquake and fire
On 18 April, an earthquake measuring 7.8 on the Richter scale strikes San Francisco with full force. Gas mains burst, fires break out. It affects an area of 100 hectares and destroys 490 blocks, leaving more than 3,000 people dead. The loss to the economy comes to 520 million dollars, an inconceivably high figure in those days, with Munich Re’s share amounting to 11 million marks. The San Francisco earthquake is still Munich Re’s most costly natural catastrophe loss in real terms.
1907 – Development of luggage insurance
The idea of a Hungarian wood trader to insure luggage as it is handed over at the counter at first stimulates little interest on the part of insurers. But Carl von Thieme decides that the risk is worth taking. On 9 May 1907, Europäische Reiseversicherungs-AG is founded in Budapest, with Munich Re taking a participation of 50,000 crowns.
1907 – Cover for motor liability
Carl G. Molt, General Manager of the Allgemeiner Deutscher Versicherungsverein in Stuttgart, introduces motor third-party insurance. Munich Re’s first client for this new insurance product is the insurance company Urania.
