In a world of increasing automation and standardization, Europe’s big reinsurers are betting that a more personal touch can reverse years of falling prices.

Companies including Munich Re AG and Swiss Re AG are increasing their focus on policies that are tailor-made for their customers, which give them greater pricing power and a competitive advantage over smaller peers that can’t offer such products.

“We treat our clients on a very individual basis, which helps us buffer the price cycle these days,” Torsten Jeworrek, the head of reinsurance at Munich Re said at a press conference in Monte Carlo. “In the bread-and butter-business we look very much at profitability and we do not want to grow as long as the markets are like this.”

Reinsurers are trying to convince customers to choose coverage designed for the specific risks they face instead of more standardized plans. Rates for traditional reinsurance have fallen for four straight years and may continue to slide in 2017 because of oversupply and a lack of major natural disasters recently.

Prices for individualized coverage are harder to compare and reinsurers are betting that this will give them greater ability to charge higher prices. At Munich Re, personalized plans now represent about 40 percent of the property and casualty reinsurance business. Swiss Re said it would strengthen its focus on tailored reinsurance coverage because those plans will mean “higher margins as we don’t have to compete with 100 different reinsurers,” Chief Executive Officer Christian Mumenthaler said in Monte Carlo.

“Structured solutions are an answer to the low-rate environment, they improve margins,” said Michael Haid, an insurance analyst at Commerzbank AG. “Using their manpower and knowledge, big reinsurers can underwrite deals smaller players would struggle with.”

Reinsurers’ underwriting results are getting more attention from shareholders as ultra-low interest rates hurt earnings from their investments. Combined ratios, which measure premium income against claims and costs, are worsening at many of the largest firms. A ratio higher than 100 percent means a carrier is making a loss from underwriting.

Returns for the global reinsurance industry will continue to weaken, pushing combined ratios on average to as much as 102 percent this year and as much as 104 percent in 2017, S&P Global Ratings said in a report on Sept. 6.

“The soft cycle is proving to be deeper and longer than many market participants anticipated in 2013, with falling premiums and increased competition putting pressure on reinsurers’ top and bottom lines,” S&P said in the report. Despite the pressure on earnings, it expects capital buffers to “remain resilient” and ratings to be little change over the next 12 months.

Demand for reinsurance has been subdued for almost a decade. A lack of very costly disasters since the Japan tsunami in 2011 means buyers feel less pressure to increase coverage, while reinsurers are sitting on high enough capital buffers to allow them make further price concessions.

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