DGAP-News: Hannover Re satisfied with outcome of treaty renewals as at 1 January 2012
(firmenpresse) - DGAP-News: Hannover Rückversicherung AG / Key word(s): Miscellaneous
Hannover Re satisfied with outcome of treaty renewals as at 1 January
2012
01.02.2012 / 07:30
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Hannover Re satisfied with outcome of treaty renewals as at 1 January 2012
- Strong underwriting discipline prompts hardening trend on non-life
reinsurance market
- Significant price increases, especially in property catastrophe
business, owing to heavy loss expenditure in 2011
- No further rate erosion in casualty business
Hannover, 1 February 2012: Hannover Re expressed satisfaction with the
outcome of the treaty renewals in non-life reinsurance as at 1 January
2012. 'We achieved better conditions and rates on average than in the
previous year. In segments impacted by natural catastrophes the price
increases were, as anticipated, particularly marked. Yet it is still too
soon to speak of a hard market across the board in non-life reinsurance',
Chief Executive Officer Ulrich Wallin remarked.
Of the total premium volume booked in the previous year in non-life
reinsurance (excluding facultative business and structured reinsurance)
amounting to EUR 5,485 million, roughly two-thirds of the treaties with a
volume of altogether EUR 3,477 million (63%) were up for renewal as at 1
January 2012. Of this, a premium volume of EUR 3,130 million was renewed,
while treaties worth EUR 347 million were either cancelled or renewed in
modified form. Including increases of EUR 563 million from new or modified
treaties and thanks to improved prices, the total renewed premium volume
came in at EUR 3,693 million - equivalent to growth of 6%.
The treaty renewals again demonstrated the considerable importance that
ceding companies continue to attach to a reinsurer's financial strength. A
very good rating is a prerequisite for a reinsurer if it is to be offered
and awarded the entire spectrum of business. With its excellent ratings
('AA-' from Standard&Poor's, 'stable' outlook, and 'A' from A.M. Best,
'positive' outlook), Hannover Re is one of the reinsurers that meets this
requirement.
The renewals for business in Germany passed off better than expected.
Developments in motor insurance were very pleasing; the persistent premium
erosion in this area has come to an end. The hail events in August and
September 2011 as well as losses from prior years helped to push premiums
higher in own damage business. The total premium volume for German business
increased by 3%, also thanks to an enlarged customer base.
In North America the treaty renewals were satisfactory overall; not quite
50% of the portfolio was up for renewal in this region. In US property
business it was for the most part possible to obtain higher rates. Price
increases of up to 30% were attainable for loss-impacted programmes. In US
casualty business the rate erosion was halted. Particularly pleasing was
the situation in Canada, where on the whole sizeable rate increases were
secured. The premium volume for total business in North America grew by
around 7% as at 1 January 2012.
The treaty renewals in marine business passed off satisfactorily; rates
remained largely stable. In the offshore energy sector Hannover Re booked
rate increases - which were in fact considerable under programmes that had
suffered losses. The company boosted its premium volume by 12% in the
treaty renewals. In aviation reinsurance rate erosion was observed in both
primary insurance and reinsurance on account of the good underwriting
results recorded in prior years. The business nevertheless continues to be
attractive, prompting the company to enlarge its premium volume. The
outcome of the renewals in credit and surety reinsurance - where around 75%
of the portfolio was renewed - was satisfactory for Hannover Re. Rates here
declined slightly on the back of the pleasing loss ratios seen in recent
years. The premium volume grew in view of larger shares written with our
key accounts.
The picture in global reinsurance business was a mixed one. The total
premium volume grew by 8%. In developed markets the portfolio remained
broadly stable, while in Asia and the Middle East further appreciable
growth was booked. The most marked changes were observed in property
catastrophe business. In light of the substantial loss expenditure from
natural catastrophes in the previous year, prices for reinsurance covers
improved significantly. In Australia, for example, prices soared by 60% on
average; the increase in the United States was in the lower double digits.
Hannover Re is looking to further sizeable rate increases for the 1 April
2012 renewal date in Japan and in the New Zealand renewals.
Preview 2012
In view of the pleasing outcome of the treaty renewals as at 1 January 2012
and against the backdrop of slight hardening on the market, Hannover Re
anticipates a good financial year in non-life reinsurance. 'We also expect
to see further rate increases in the treaty renewals during 2012, when a
good third of our non-life reinsurance portfolio is renegotiated. All in
all, we should enjoy continued profitable growth', Mr. Wallin confirmed.
Hannover Re has budgeted EUR 560 million for major losses incurred in the
current financial year, as against an amount of EUR 530 million in the
previous year. This increase reflects inter alia the enlarged premium
volume in non-life reinsurance and the rise in insured values.
For further information please contact:
Corporate Communications:
Karl Steinle (tel. +49 511 5604-1500,
e-mail: karl.steinle(at)hannover-re.com)
Media Relations:
Gabriele Handrick (tel. +49 511 5604-1502,
e-mail: gabriele.handrick(at)hannover-re.com)
Investor Relations:
Klaus Paesler (tel. +49 511 5604-1736,
e-mail: klaus.paesler(at)hannover-re.com)
Please visit: www.hannover-re.com
Hannover Re, with a gross premium of around EUR 11 billion, is the
third-largest reinsurer in the world. It transacts all lines of non-life
and life and health reinsurance and is present on all continents with
around 2,200 staff. The rating agencies most relevant to the insurance
industry have awarded Hannover Re very strong insurer financial strength
ratings (Standard&Poor's AA- 'Very Strong' and A.M. Best A 'Excellent').
Please note the disclaimer:
www.hannover-re.com/misc/disclaimer-pr-050811
End of Corporate News
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Language: English
Company: Hannover Rückversicherung AG
Karl-Wiechert-Allee 50
30625 Hannover
Germany
Phone: +49-(0)511-5604-1500
Fax: +49-(0)511-5604-1648
E-mail: info(at)hannover-re.com
Internet: www.hannover-re.com
ISIN: DE0008402215
WKN: 840 221
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover;
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart; Terminbörse EUREX
End of News DGAP News-Service
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154641 01.02.2012
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Datum: 01.02.2012 - 07:30 Uhr
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News-ID 109716
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