DGAP-News: Hannover Re boosts premium by 2% in 1 January treaty renewals
(firmenpresse) - DGAP-News: Hannover Rückversicherung AG / Key word(s): Miscellaneous
Hannover Re boosts premium by 2% in 1 January treaty renewals
02.02.2011 / 07:30
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Hannover Re boosts premium by 2% in 1 January treaty renewals
- Demand for reinsurance stable
- Treaty renewals see modest premium growth
- Sharp rate increases in offshore energy and European motor liability
business
- Rate softening in catastrophe business
- Profit target for 2011 confirmed
Hannover, 2 February 2011: Hannover Re is satisfied with the outcome of the
treaty renewals in non-life reinsurance as at 1 January. 'The renewals
passed off better than expected for our company. Despite softening
tendencies in the market, we achieved broadly stable rates and conditions
and are therefore thoroughly satisfied with the outcome. In certain
segments, such as offshore energy business and European motor liability, we
were even able to push through price increases', Chief Executive Officer
Ulrich Wallin explained.
Of the previous year's total premium volume in non-life reinsurance
(excluding facultative business and structured reinsurance) amounting to
EUR 4,867 million, a good two-thirds of the treaties worth altogether EUR
3,282 million (67%) were up for renewal as at 1 January 2011. Of this, a
premium volume of EUR 2,993 million was renewed, while treaties worth EUR
284 million were either cancelled or restructured. 'Against the backdrop of
more intense competition, we set particularly great store by selective
underwriting of treaties. We were thus again able to generate profitable
growth in this year's renewal phase', Mr. Wallin emphasised.
Including increases of EUR 348 million from new or restructured treaties
and thanks to improved prices in some areas, the total renewed premium
volume thus came in at EUR 3,346 million. Making allowance for treaties
with a later renewal date and assuming constant exchange rates, gross
premium in non-life reinsurance (excluding facultative business and
structured reinsurance) is likely to surpass the previous year's level at
EUR 4,954 million (+1.8%).
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 and 'A' from A.M. Best), Hannover Re is one
of the reinsurers that meets this requirement.
In its domestic German market Hannover Re - through its subsidiary E+S Rück
- was able to further cement its position as one of the leading reinsurers.
While prices for loss-impacted programs rose, programs that had been spared
losses saw rate declines. The development of motor liability business was
very pleasing. 'In this important line for our company we were again able
to obtain rate increases averaging 5% in non-proportional business', Mr.
Wallin noted.
The treaty renewals in North America were satisfactory overall; the
portfolio remained virtually stable. In property business modest rate
reductions were observed in some instances, but prices were still
commensurate with the risks. The picture in casualty business was a mixed
one; rates for standard casualty business, an important segment for
Hannover Re, were stable. Unchanged or slightly lower rates were recorded
in the professional indemnity lines.
The situation in marine business, especially the offshore energy sector,
was very pleasing. As anticipated, rates surged sharply on the back of the
'Deepwater Horizon' drilling rig accident and the premium volume
consequently grew by 20%.
Hannover Re was also satisfied with the development of aviation business.
The written premium volume increased by 14%. Despite softening tendencies
attributable to excess capacities in the market, prices for the most part
remained stable.
Following above-average rate increases over the past two years in credit
and surety reinsurance, the treaty renewals as at 1 January 2011 were
shaped by a considerably more competitive climate. Against this backdrop,
prices in credit reinsurance declined. Given the company's selective
underwriting policy, the volume contracted by 11%. Nevertheless, the prices
obtained were still on a good level. Rates in surety reinsurance remained
stable.
The volume in global treaty business increased by 3%, although the picture
was a mixed one: rates in the developed markets were broadly stable, while
vigorous growth was the hallmark of emerging markets.
In worldwide catastrophe business prices for reinsurance covers for the
most part retreated. Rate reductions were particularly marked for US risks.
Hannover Re responded accordingly by scaling back its business in areas
where the price situation was not adequate. Overall, Hannover Re reduced
its volume in this segment by 15%. Appreciable double-digit price increases
were booked under loss-impacted programs. In Chile, for example, prices
climbed by up to 40% following the devastating earthquake in February 2010.
Outlook for 2011
In view of the satisfactory treaty renewals as at 1 January, Hannover Re
anticipates a good financial year in non-life reinsurance. 'For 2011 we see
sufficient opportunities for selective profitable growth. In this context
we shall concentrate on segments where prices are rising or where they
adequately reflect the risks', Mr. Wallin stated. The company expects net
premium earned from its total non-life reinsurance portfolio to remain
stable or show modest growth of up to 3% in 2011 combined with healthy
profitability.
Hannover Re expects net premium in life and health reinsurance to record an
increase in the range of 10% to 12% in the current financial year.
For total business Hannover Re anticipates net premium growth of
approximately 5% at constant exchange rates.
The return on investment should be in the region of 3.5%.
Assuming that the burden of major losses remains within the expected bounds
and as long as there are no sharp downturns on capital markets, Hannover Re
is looking to generate Group net income in the order of EUR 650 million. As
to the dividend, the company still anticipates a payout in the range of 35%
to 40% of its IFRS consolidated net income after tax.
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 10 billion, is the
third-largest reinsurer in the world. It transacts all lines of non-life
and life and health reinsurance. It maintains business relations with more
than 5,000 insurance companies in about 150 countries. Its worldwide
network consists of more than 100 subsidiaries, branch and representative
offices on all five continents with a total staff of roughly 2,100. 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').
Disclaimer:
Some of the statements in this press release may be forward-looking
statements or statements of future expectations based on currently
available information. Such statements are naturally subject to risks and
uncertainties. Factors such as the development of general economic
conditions, future market conditions, unusual catastrophic loss events,
changes in the capital markets and other circumstances may cause the actual
events or results to be materially different from those anticipated by such
statements. Hannover Re does not make any representation or warranty,
express or implied, as to the accuracy, completeness or updated status of
such statements. Therefore, in no case whatsoever will Hannover Re and its
affiliate companies be liable to anyone for any decision made or action
taken in conjunction with the information and/or statements in this press
release or for any related damages.
End of Corporate News
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Language: English
Company: Hannover Rückversicherung AG
Karl-Wiechert-Allee 50
30625 Hannover
Deutschland
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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110687 02.02.2011
Datum: 02.02.2011 - 07:30 Uhr
Sprache: Deutsch
News-ID 33117
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