Annual Report 1997/1998 - Munich Re

Munich Re Report of the Board of Management
Africa, Near and Middle East In the business region Africa, Near and Middle East we succeeded in
increasing our premium by as much as 30% to DM 1,044m (807m) in
1997. The result was considerably worse than in the previous year,
however, owing to big deficits in fire and health business. For 1998 we
expect a slight decline in premium income. This is mainly due to a
Gross premiums in DM m
reduction in the volume of our health business as a consequence of
portfolio improvement measures. The result should improve again.
731 732 730
807
1993 1994 1995 1996 1997
Gross premiums by country
1,044
South Africa 40% (36%)
Israel 28% (30%)
Other countries 32% (34%)
Africa
The largest and most advanced insurance market in Africa continues
to be South Africa, whose economy did not develop as well in 1997 as
in the previous years.
Our South African subsidiary, Munich Reinsurance Company of
Africa, Johannesburg, is the largest non-life reinsurer in the region. In
1997 it recorded a significantly increased premium income of R 1.4bn
(1.1bn). Owing to an unexpectedly large number of fire and hail losses,
however, the profit fell to R 34.8m (58.9m).
Israel
In Israel the general economic situation was mixed in 1997. Despite
increased growth, unemployment rose; inflation also accelerated.
In the highly developed Israeli insurance market, competition in
insurance and reinsurance also intensified; in spite of this, we
managed to expand our business in some sectors. Owing to the
oversupply of capacity, there is growing pressure on price levels and
thus also on our reinsurance results in nearly all areas.
Arab countries
We increased our premium income in the Arab countries again in
the year under review. As in the previous year, health insurance
proved to be the class with the biggest growth, albeit currently with
negative results. The engineering office we opened in Cairo in 1997
will successively extend the radius of its activities to other Arab
markets and complement the service provided from Munich for the
engineering classes of business. Here, too, we see the insurance of
infrastructure projects as a door-opener for further business
opportunities and the development of good contacts with clients.
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