Annual Report 2010 - Hannover Re

Non-life reinsurance
Accounting for 55.5% of our premium volume, non-life reinsurance
is Hannover Re’s largest business group. We do not
pursue any growth targets here, but are instead guided by
active cycle management according to which we expand our
business if the rate situation is favourable and scale back our
portfolio if prices are inadequate.
The expectations expressed with regard to the treaty renewals
as at 1 January 2010 were confirmed over the course of the
year: prices remained broadly stable, although they softened
slightly in loss-free segments. Rate increases were also recorded
in areas that had seen sizeable losses in 2009, such as
aviation insurance or credit and surety reinsurance. The fact
that prices remained on a largely stable level also reflects the
underwriting discipline practised among reinsurers. Given the
lower returns attainable on investments owing to the low interest
rate level, the primary focus of attention was even more
heavily on underwriting results. This was also true of the various
treaty renewal phases that took place within the year.
Although the major loss situation was certainly tense throughout
the year under review, our combined ratio of 98.2% still
came in below our targeted maximum level of 100%.
The treaty renewals in North America were in line with our
expectations, although the rate level in many areas was not
adequate. We therefore exercised caution in assuming additional
risks. In credit and surety business – despite growing
capacity on the market – we were again able to push through
significantly improved conditions and expand our market position.
In worldwide catastrophe business prices for reinsurance
covers declined as expected owing to the relatively untroubled
major loss experience in 2009 as well as the improved capital
resources of primary insurers. Rate reductions in the United
States were particularly marked; price increases were nevertheless
obtained under loss-impacted programmes in certain
regions.
All in all, we enjoyed very good opportunities to generate
profi table business and extend our market share. The focus of
our activities was on the markets of China as well as Central
and Eastern Europe, facultative reinsurance and agricultural
risks. In the UK market, too, we successfully extended our
position.
Details of developments in the individual markets are provided
on the following pages.
Management report
Key figures for non-life reinsurance
Figures in EUR million
2010
+/- previous
year
2009 2008 2007 2006
Gross written premium 6,339.3 +10.3% 5,746.6 4,987.8 5,189.5 6,495.7
Net premium earned 5,393.9 +3.1% 5,229.5 4,276.7 4,497.6 4,718.7
Underwriting result 82.4 –42.6% 143.5 184.7 (26.7) (71.0)
Net investment income 721.2 +28.1% 563.2 11.1 783.3 831.7
Operating result (EBIT) 879.6 +20.3% 731.4 2.3 656.7 670.1
Group net income 581.0 +22.9% 472.6 (160.9) 549.5 478.5
Earnings per share in EUR 4.82 +22.9% 3.92 (1.33) 4.56 3.97
Retention 88.9% 94.1% 88.9% 82.5% 72.4%
Combined ratio 1 98.2% 96.6% 95.4% 99.7% 100.8%
1 Including expenses on funds withheld and contract deposits
Hannover Re Group annual report 2010
Non-life reinsurance Management report
21