Munich Re to acquire U.S. weather risks specialist from Bermuda company

Munich Re has announced an agreement to acquire the weather and weather-related energy risk management unit of RenaissanceRe Holdings Bermuda, dubbed RenRe Energy Advisors (REAL). Terms of the deal were not disclosed.

REAL’s experts have more than 16 years of experience covering and trading weather risks, according to Munich Re. Its main clientele are energy companies in the United States and in other markets requiring coverage against fluctuations in income because of adverse weather conditions, the reinsurer said.

The REAL business also includes trading of commodity contracts in oil and natural gas. Munich Re has been working with REAL for more than three years as a risk capacity provider.

“With the acquisition of REAL, we are actively expanding our know-how and product range of weather risks and investing in a promising and profitable market,” noted Thomas Blunck, Munich Re’s board member responsible for the segment.

“The new unit is an ideal complement to our expertise in the field of weather trends and weather risks, and also to our existing business model with solutions for weather risks,” he added.

The reinsurer already has offerings that address  weather risks, but with the new deal, it will be able to cover to an increasing extent, investors in renewable energies – against lack of wind or sunshine, for instance. – in addition to traditional energy firms, it noted.

The transaction is expected to close in the fourth quarter of 2013, and is subject to regulatory approvals and customary closing conditions.