Annual Report 2010 - Hannover Re

The insurance sector continues to be fiercely competitive and
rates in original business consequently remained relatively
stable on a low level in the year under review. Modest rate
improvements were, however, recorded under some commercial
and industrial fire programmes.
The situation on the reinsurance side was largely unchanged
year-on-year. Rates for the most part remained stable. Conditions
in property business – which is written predominantly
on a proportional basis – continued to adequately reflect the
risks, and we were able to book stable commissions. On average
we obtained slight increases for casualty covers. The most
important single line for our company in Japan is natural catastrophe
business, where rates were essentially unchanged.
The claims experience in the year under review was moderate,
with no major losses recorded. As expected, the premium volume
was stable. Overall, we are satisfied with the results of
our Japanese business.
Southeast Asia
Hannover Re’s main markets in Southeast Asia are Malaysia,
the Philippines and Indonesia. Our portfolio here, which we
further diversified in the year under review, is composed predominantly
of property business. Lines such as personal accident,
crop and livestock insurance as well as structured reinsurance
products were systematically expanded. We also
continued to engage in the field of microinsurance in the year
under review. These products enable even low-income individuals
to purchase insurance protection.
population were the flood events in Pakistan. What is more,
losses also resulted from the political unrest in Thailand. Overall,
the major loss expenditure in Southeast Asia remained
within the low double-digit million euro range.
China
The Chinese insurance market again generated strikingly vigorous
growth in the year under review. Special reference
should be made to the more stringent requirements adopted
by the China Insurance Regulatory Commission with respect
to the equity resources of insurance companies. Demand for
reinsurance solutions that could serve as equity substitutes
was therefore marked. Overall, the industry generated a good
underwriting result. Similarly, reinsurers generated very
healthy growth rates and good results in 2010. Governmentsponsored
subsidy programmes have again sharply driven up
sales of domestically built motor vehicles. Consequently, further
substantial growth in motor insurance – the dominant line
in China – was recorded in the year under review.
Rates for non-proportional covers were stable in 2010 and –
more importantly given the dominance of proportional business
– insurance terms and conditions were maintained largely
unchanged.
Competition in the (re)insurance market is also very fierce in
view of the enormous growth opportunities. In our assessment,
China offers particularly attractive prospects in the areas
of facultative business and agricultural risks as well as in
the marine and aviation lines.
Management report
Given the greater importance attached to risk-based models
in Malaysia, we observed a surge in demand in proportional
motor business – both in traditional reinsurance and in terms
of structured solutions. We are supporting our clients here
with an eye to the increased capital requirements and in the
year under review we wrote the largest contract to date –
measured by premium volume – in the region.
It remains the case that rates in the primary insurance sector
are scarcely adequate in Southeast Asian markets, and hence
reinsurance conditions also deteriorated in 2010 relative to
the previous year.
As forecast, our premium volume in China increased appreciably.
Our Shanghai branch, which commenced operations in
the year under review, improved our business opportunities
as we had expected. As a “local” reinsurer, we now also enjoy
access to treaties in the domestic currency.
Although China was affected by a number of (natural) disasters
in the year under review, the insured losses remained
moderate. We did not incur any major losses.
We are satisfied with the development of our portfolio from
the Chinese market.
Our premium volume grew substantially in the year under
review.
In terms of major losses, the region of Southeast Asia came
under strain in 2010. Particularly devastating for the local
Hannover Re Group annual report 2010
Non-life reinsurance Management report
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