Annual Report 2003 - Hannover Re

Management report
premium development and results
Fire
Fire
in EUR million
Worldwide, fire business remains one of the
most important risks written by Hannover Re.
Thanks to far-reaching portfolio rehabilitation
efforts among insurers in several countries and
the absence of significant
major losses, we boosted the
2003
2002
Gross written
premiums 959.4 1 199.2
underwriting result by 65.2%
to EUR 128.0 million (EUR
77.5 million).
Loss ratio (%)
Underwriting
result (net)
75.1
128.0
59.7
77.5
Premiums in our fire business,
on the other hand, contracted
by 20.0% to EUR
959.4 million (EUR 1,199.2
million). A particularly crucial factor here was the
restructuring of our business with HDI. We also
slightly scaled back our proportional fire busi-
ness in some areas so as to write an increased
volume of even more attractive casualty business.
The exceptionally low loss ratio of 59.7%
recorded in 2002 was out of reach in the year
under review, although the figure of 75.1% was
still a very good achievement. An amount of EUR
6.5 million was withdrawn from the equalisation
reserve, following allocations of EUR 85.9 million
in the previous year. A contribution of EUR 16.2
million was made to the reserve for terrorism risks
in the year under review.
Casualty
Casualty
in EUR million
The so-called "hard market" was especially
noticeable in casualty business. These generally
longer-tail lines experienced sharp rate increases
in some areas, while premiums in the property
lines appeared to have peaked and stabilised at
the upper end of the cycle.
2003
2002
Gross written
premiums 1 404.5 1 238.0
Loss ratio (%) 69.8 99.7
Underwriting
result (net) 44.6 14.1
As in the previous year
we added an increasing volume
of long-tail casualty business to
our portfolio. Gross premium
income climbed by 13.4% to
EUR 1,404.5 million (EUR
1,238.0 million).
Particularly pleasing was the year-on-year
reduction of almost 30 percentage points in the
loss ratio down to 69.8% (99.7%). The underwriting
result consequently improved by a substantial
216.3% to EUR 44.6 million (EUR 14.1
million). An amount of EUR 211.4 million was
allocated to the equalisation reserve, following
a withdrawal of EUR 101.7 million in the previous
year.
We strengthened the IBNR reserve with an
allocation of EUR 153.1 million from the nontechnical
account.
North America, traditionally already our
largest casualty market, offered particularly attractive
business opportunities. The premium volume
in the USA surged by 28.9% in the year
under review. The commercial and professional
indemnity lines were the most prominent components
of the portfolio.
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