In his first interview as Ergo Group CUO, Edward Ler outlines his vision for the growth of Munich Re’s retail arm outside its domestic market.
Munich Re’s Ergo business has diversified its portfolio in recent years through the expansion of its international arm, which generated more than 6 billion euros in revenue in 2024.
Approximately 3.8 billion euros of that was for P&C business, with Poland and Thailand the most rapidly expanding territories for the carrier.
Ergo’s underwriting operations are led by Edward Ler, a Singaporean whose experience spans stints with Chubb, RSA and Allianz across multiple countries.
“I consider myself an experienced international insurance manager,” he tells The Insurer. “Since I started at Ergo around two years ago, we’ve seen great momentum.
“Our strategy is to build a low-volatility insurance portfolio as part of the diversified book of Munich Re Group. Building a retail insurance business comes with strict cost discipline.”
Ler says Ergo maintains a good portfolio of core European business while also investing in growing markets in Asia.
“In our P&C portfolio, we have a significant business in CEE, particularly in Poland, as well as in the Baltic countries,” he says.
He highlighted the deal announced in July 2024 for Ergo to acquire Gjensidige’s portfolio in the Baltics, a move Ler says will make it a market leader in the region.
“We are also a top 10 P&C insurer in Thailand, the largest economy in Southeast Asia,” he says.
Ler says Ergo’s immediate priority for its international business is to strengthen its position in those core markets rather than seek positions in new territories.
Ergo’s international business has increased its profit contribution to the Munich Re Group since Ler’s arrival, with its net result rising to 301 million euros. The division’s combined ratio stood at 91.9% for the full year.
“Our ambition is to grow in line with the market,” he says.
Ler says Ergo takes a prudent approach to reinsurance.
“We are buyers of reinsurance in the external market, and we also retain exposure within the group. Many of our competitors also use a hybrid mix of internal and external risk transfer,” he says.
CHANGING RISK LANDSCAPE
Ler also highlights the importance of insurers taking steps to help protect customers as the risk landscape evolves.
He says one of the key steps taken by Ergo has been to improve the granularity of data it uses when underwriting flood risk in Germany.
“The German Insurance Association did a lot of work collecting data, and we consider ourselves one of the first insurers to improve our risk modelling to also include this data,” he says.
“We are now able to quantify risk exposure of flash flood at postcode level. This means we can charge a risk-appropriate premium, which is a step forward.
“Insureds can also access a database to better understand flood exposures of property and assets.”
He adds: “By making customers know there is database, it will help people protect themselves by investing in appropriate flood protection measures.
“We also educate through our sales people that we are pricing for exposure at a granular level.”
Ler says making the topic of natural hazard exposures better understood by consumers is a key part of making the future insurable.
