Annual Report 2010 - Hannover Re

Thanks not least to a new branch of Inter Hannover in Australia
we were able to expand our business. Not only did we
extend the geographical reach of our involvement in direct
business, we also launched new products on the market. In
cooperation with a US company, for example, we developed
the “Energy Savings Warranty” programme to provide an insurance
backstop for energy-saving guarantees in the United
States.
We booked rate increases in the UK in the areas of motor own
damage insurance and professional indemnity for lawyers.
Overall, rates in property and liability business were stable.
Our second company writing specialty business, namely Compass
Insurance Ltd., is one of the leading players in this segment
in South Africa. The company’s strategic objective,
which was successfully accomplished in the year under review,
is to expand profitable business with underwriting agencies.
The reinsurance of this portfolio is in large measure assumed
by Hannover Re Africa. Altogether, agency business
accounts for roughly two-thirds of the total non-life reinsurance
written by Hannover Re Africa.
Both companies – Compass Insurance and Inter Hannover –
generated highly satisfactory results in the year under review.
Global reinsurance
We combine all markets worldwide under global reinsurance,
with the exception of our target markets of Germany and
North America and the specialty lines. This segment also encompasses
worldwide catastrophe business, facultative reinsurance,
agricultural risks and Sharia-compliant retakaful
business.
Breakdown of gross written premium in global reinsurance
13.8%
Catastrophe business
1,774.7 million). The combined ratio soared to 106.1%
(87.9%) owing to an exceptionally heavy burden of major
losses. The operating profit (EBIT) consequently shrank to
EUR 111.9 million (EUR 356.2 million).
Western and Southern Europe
France
The 2010 financial year in France was again notable for intense
competition. The rate level continues to be unsatisfactory
in some areas, and our primary goal therefore was to
maintain the profitability of our portfolio. We were largely successful
in accomplishing this aim.
Hannover Re is one of the major reinsurance players in the
French market and a leader in the builder’s risk and personal
accident lines. In builder’s risk insurance we continued to pursue
our strategy of long-term expansion in the year under
review. Overall, the premium volume in France contracted
slightly.
Netherlands
The higher capital requirements anticipated with the advent
of Solvency II prompted further mergers and acquisitions
among smaller insurers in the year under review. What is
more, the more exacting requirements placed on risk management
are giving rise to stronger demand for natural catastrophe
covers. According to the standards set down by Dutch
insurance regulators, companies must now protect themselves
against “200-year-events” under catastrophe covers.
Hannover Re stands by its strategy of expanding the share of
its Dutch business deriving from casualty lines. In view of the
more attractive rate situation prevailing in non-proportional
casualty business, we therefore moderately enlarged our portfolio;
property business, on the other hand, is written highly
selectively. In motor insurance it would seem that tariffs in
original business have now bottomed out.
Management report
31.3% Facultative
reinsurance
54.9% International
treaty business
After the high frequency of property claims incurred in the
previous year, the loss situation in the year under review was
moderate. The loss ratio consequently improved.
Our premium volume from the Dutch market contracted slightly.
The development of markets in our global reinsurance segment
was challenging in the year under review. The premium
volume here surged by 24.7% to EUR 2,213.4 million (EUR
Hannover Re Group annual report 2010
Non-life reinsurance Management report
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