International reinsurance giant Munich Re AG (DAX: MUV) is intensifying its efforts to change its contracts with Israeli insurance companies to quote in shekels rather than dollars. Munich Re client executive Israel Hans Johann Hornisch sent an e-mail to Israeli companies and the Ministry of Finance Capital Markets, Insurance and Savings Department, asking, "Shall we do our reinsurance business in the world's strongest currency?"
Hornisch wrote, "I would like to reiterate our interest to change the currency for all reinsurance cessions from US dollars to shekels - completely and as soon as possible. Here and there we might need an interim solution but the best for both sides would be a clean cut."
Hornisch continued, "Please let me know the current status of your preparations, for treaty and facultative business," and he signed off "Lehitra'ot le'dollar, baruch haba le'shekel" (good-bye to the dollar, hello to the skekel).
Swiss Re AG (SWX: RUKN) is also trying to switch its contracts in Israel from dollars to shekels. Sources believe that when these two reinsurance companies complete the change-over, other leading international reinsurers will follow suit.
The move comes against the weakness of the dollar on international markets, and the shekel's appreciation against the dollar and other currencies in recent months.
Munich Re is one of the world's largest reinsurers, and together with Swiss Re, is at the pinnacle of the industry.
Published by Globes [online], Israel business news - www.globes-online.com - on July 21, 2008
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