Annual Report 2010 - Hannover Re

The establishment of the Federal Insurance Office – as a point
of contact on the federal level for foreign agencies and associations
– heralds a significant new development in insurance
regulation in the United States. We were also pleased that
regulators – initially in Florida and at the beginning of 2011 in
the state of New York as well – granted Hannover Re the status
of “eligible reinsurer”. This enables us to write our business
at improved conditions; specifically, our technical reserves no
longer need to be collateralised in the full amount, but rather
only to a level of 20%. We hope that further US states will
follow suit with such an arrangement.
Having been largely spared natural disasters in the last two
years and buoyed by the recovery on the capital market, our
clients were able to generate healthy profits. As a result, their
equity resources have probably improved by around 10%.
Yet the total premium booked by US primary insurers grew
only minimally in the year under review by 1%. Competition
continued to be very fierce in almost all areas of the insurance
business, causing rates to soften appreciably – above
all in industrial property business. Rate increases were only
recorded under small and mid-sized commercial programmes
as well as in retail business.
Our clients particularly value our extensive product range and
our involvement in all lines – provided prices are adequate.
Given that the market environment is still relatively soft, we
again chose not to increase our market share in the year under
review. However, seeing as considerably more opportunities
to participate are open to us than we are able to act on in the
prevailing soft market, we should be able to further expand
our portfolio in a hard market phase.
Rates in property business were satisfactory, although modest
reductions were observed in the course of the year. The
absence of any appreciable catastrophe losses was a contributory
factor here. In the casualty sector it was possible to avoid
any further premium erosion. Our premium volume in standard
casualty business was maintained on a constant level in
light of good results.
All in all, we are satisfied with the development of our business
in North America. Gross premium remained stable in the
original currency.
The combined ratio for our business in North America stood
at 101.0% (106.4%).
Management report
Hardly any new market players entered the US market and
reinsurers – despite increased equity resources – for the most
part acted with considerable discipline. The trend towards primary
insurers carrying greater retentions was sustained only
to a modest extent in the year under review. While reinsurance
rates in certain lines did come under pressure, they nevertheless
remained relatively stable overall; this was also especially
true on the conditions side.
With a view to further diversifying our portfolio we again
scaled back the share attributable to larger cedants in the year
under review, while at the same time expanding our business
relationships with mid-sized regional players and mutual insurers.
This business segment now accounts for 20% of our
total portfolio. Altogether, we work with around 500 clients in
North America and maintain more than 2,000 treaties. Market
players confirm that we are the reinsurer with the broadest
portfolio diversification.
Hannover Re Group annual report 2010
Non-life reinsurance Management report
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