Annual Report 2010 - Hannover Re

Northern Europe
Latin America
In the markets of Northern Europe Hannover Re is a major
provider of insurance covers. This is due both to the capacities
that we make available and our very good rating. The fact that
we are the only reinsurer with a branch in Scandinavia also
works to our advantage.
Competition in Northern Europe remains fierce in both the
primary and reinsurance sectors. With the markets softening,
we have scaled back our portfolio. The mutual insurers segment
continues to be a focal point of our underwriting policy.
Several natural disasters occurred in the year under review,
causing losses that also affected Hannover Re; the severe rainfall
in Denmark may be mentioned by way of example.
Central and Eastern Europe
The primary insurance markets of Central and Eastern Europe,
which had been buffeted by the financial and economic crisis,
recovered somewhat in the course of the year under review.
Rates in original business nevertheless continued to slide on
account of increased competition. It can, however, be assumed
that markets in this region will grow at a markedly
brisker pace than those in Western Europe. Rates and conditions
on the reinsurance side were broadly stable in the year
under review and in most cases on a level commensurate with
the risks.
We have defined the countries of Central and Eastern Europe
as strategic growth markets – always assuming that business
here remains profitable. In this region Hannover Re ranks
among the top three players in the reinsurance industry. We
are very well positioned and quote our business in all lines and
markets.
In the year under review we again observed a trend towards
the increased purchase of non-proportional reinsurance arrangements.
A greater awareness of major catastrophic events
is prompting stronger demand for additional capacity in the
area of natural catastrophe covers. We also observed higher
limits in casualty business.
Although the markets of Central and Eastern Europe were affected
by a number of natural disasters in 2010, we are satisfied
overall with the development of our business. Our premium
volume was again boosted in the year under review.
The most important Latin American markets for our com pany
are Mexico, Argentina, Brazil, Colombia, Venezuela and
Ecuador. Along with the writing of agricultural risks, catastrophe
covers are especially interesting here.
The effects of the financial and economic crisis on Latin America
were considerably milder than in Europe; the most severe
repercussions were felt in Mexico. An adverse factor here –
albeit in other countries too – was that workers abroad stopped
sending money home. In Venezuela the political situation has
created a difficult environment for insurers and reinsurers,
and we therefore operate very cautiously in this market.
Our goal for 2010 was to boost premium income; we accomplished
this in most markets. Within our underwriting policy
we placed a greater emphasis on the casualty sector, because
rates here tended to be more stable. On the other hand, the
importance of industrial business in our portfolio continues to
diminish.
In Brazil, where we have maintained a representative office
since 2008, we operate as an “admitted reinsurer”. We were
able to acquire additional market shares in the year under
review. The primary market is growing very rapidly, and considerably
more quickly than the reinsurance market. Competition
is tending to intensify in this market on both the insurance
and reinsurance side, and we therefore practice a highly selective
underwriting strategy.
The earthquakes in Haiti and Chile in the year under review
not only represented two enormous human disasters – the
Chile earthquake also produced an exceptionally heavy burden
of major claims for the (re)insurance industry. With an
estimated market loss of around USD 12 billion, the Chile
earthquake is the largest loss event in Latin America. For Hannover
Re, the net strain from this event was EUR 181.9 million;
the earthquake in Haiti cost our company EUR 27.2 million.
Japan
Japan is our largest Asian market. Our service company in
Tokyo affords us good insight into the Japanese market. Longterm
business relations are traditionally of great importance
in Japan. Thanks to our very good rating we were again a
particularly highly sought-after partner for our cedants in the
year under review. We transact business across all segments
and enjoy the status of “core reinsurer” with most major primary
insurers.
32 Management report Non-life reinsurance
Hannover Re Group annual report 2010