Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006 Management report_Reinsurance
Asia, Australasia, Africa
Premium income stable at €1.9bn
Pleasing business performance
Portfolio quality improved in core markets
Responsible for
Middle East, Africa, Asia, Australasia, Greater China, Southeast Asia 2006 2005 2004 2003 2002
Gross premiums written €m 1,886 1,910 1,510 1,676 1,619
Combined ratio % 93.9 95.0 102.3 91.8 86.8
Despite unchanged exposure to natural hazards, 2006 was
a satisfactory year for the division Asia, Australasia, Africa.
Tropical storms gave rise to little damage in Asia last year.
At €1.9bn (1.9bn), premium income held steady compared
with 2005.
In addition to the region of Greater China (PR China,
Taiwan, Hong Kong) and Southeast Asia, the markets of
Japan, South Korea and Australia remain the division’s
core markets, altogether contributing 74% of the premiums.
To support the expansion of our business, we
provide individual and innovative solutions as well as additional
services, such as those for integrated risk management.
Higher cedant retentions – above all in Japan and
Australia – work against business expansion, but greater
risk awareness among our business partners has led to
an improvement in the quality of our portfolio.
In Japan, changes in exchange rates were partly
responsible for a premium decline to €234m (269m), but
we were able to record a stable positive result. In Korea, we
expanded our business, partly through covers for direct
insurers selling motor insurance, and increased our premium
volume by 11% to €278m (250m).
Compared with the previous year, premium income in
Austraila and New Zealand grew slightly by 4%. Thanks to
strategic partnerships with selected cedants and to the
constant optimisation of our portfolio in recent years, we
achieved a positive result for the year in spite of Typhoon
Larry, which cost us a double-digit million amount in
March 2006.
Whereas our Australian and New Zealand non-life
business was transferred to the parent company in 2005,
the life segment continues to be handled by our subsidiary
Munich Reinsurance Company of Australasia (MRA) in
order to comply with supervisory requirements. Premium
volume for this segment rose slightly in comparison with
the previous year. The following table only includes the
figures for life business.
Munich Reinsurance Company of Australasia *
All figures in A$ m 2006 Prev. year
Gross premiums written 253 234
Net earned premiums 142 131
Result for the year 8.5 10.3
Investments 477 460
* Financial statements in accordance with national accounting law.
In the Greater China region, we continued to participate
fully in the economy’s dynamic growth, as planned. While
satisfying the primary insurers’ rising demand for reinsurance
and related services, we paid close attention to riskadequate
prices, terms and conditions.
Our premium reduction in Taiwan derived mainly from
property business, where the original rate level weakened
and we pursued a consistently result-oriented underwriting
policy. In Hong Kong, the result was again very solid.
Altogether, we are the leading foreign reinsurer in this
dynamic region in terms of both result and premium
income. Our premium volume in the Greater China region
totalled €496m (499m).
In Southeast Asia, we succeeded in slightly growing
our premium income to €88m (81m) and achieved a good
result. We are observing a further stabilisation of the
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