Annual Report 2010 - Hannover Re

The premium volume of EUR 82.6 million climbed by 8.0%
in the year under review relative to the previous year’s figure
of EUR 76.5 million. Profitability in these markets remains
favourable.
Scandinavia, Eastern Europe, Turkey and Israel
Our Stockholm branch is responsible for relations with ceding
companies in the Scandinavian markets – including the three
Baltic states – as well as for Turkey and Israel. The markets
of Central and Eastern Europe (CEE/Russia/CIS), on the other
hand, are served by a team of native-speaker actuaries and
underwriters based in Hannover.
As a market-leading reinsurer in Sweden and Norway, we focus
on the reinsurance of unit-linked products in Sweden and
on bancassurance relationships in Norway. The premium volume
from Scandinavia, Turkey and Israel showed satisfactory
growth of 17.0% to reach EUR 78.0 million. The biometric risk
experience was very good, and as in previous years a sizeable
operating profit was therefore recorded.
We are still in the development phase in Eastern European
markets, where our focus is on bancassurance and unit-linked
products. The premium volume from this region – with concentrations
on Poland, Russia and Hungary – surpassed the
EUR 5 million mark for the first time and results were satisfactory.
North America incl. Bermuda
Our US subsidiary HLR America is headquartered in Orlando/
Florida, with local offices in Denver/Colorado, Charlotte/North
Carolina and Long Island/New York. It bears responsibility
for our US business in the segments of mortality solutions,
financial solutions and senior and special markets.
The development of the financial solutions segment was also
gratifying, while we tended to reduce our acceptances in the
US senior health market owing to the uncertainties in connection
with health reform in the United States. We continue to
be active in the area of group covers.
The premium income booked by HLR America totalled EUR
1,090.7 million (EUR 1,020.6 million), of which EUR 266.6
million was retained for own account. The risk experience
for own account and the investment income were in line with
expectations, enabling us to post an operating profit of EUR
13.0 million. Net income after tax came in at EUR 5.8 million.
Our subsidiary HLR Bermuda, which was established in 2007,
is active worldwide; it offers tailored reinsurance solutions
with a focus on bancassurance as well as the emerging markets
of Africa and Asia.
This company’s business developed favourably. The written
premium amounted to EUR 155.8 million (EUR 113.2 million),
of which EUR 146.8 million was retained for own account. The
operating profit came in at EUR 15.5 million (EUR 15.9 million),
corresponding to an EBIT margin of 10.5%. The company’s
net income after tax is identical to the operating profit.
Other international markets
Africa
Our Johannesburg-based subsidiary HLR Africa writes life
business in South Africa as well as in the region of Englishspeaking
southern Africa, i.e. in countries such as Botswana,
Namibia and Kenya. It concentrates on traditional individual
mortality and morbidity business, although it also supports
some rapidly growing primary insurers with financially oriented
solutions. We maintain only a highly selective presence
in group life business.
The mortality solutions segment, which experienced considerable
growth in 2009 following the acquisition of the ING life
reinsurance portfolio, was shaped in the year under review
by moves to revitalise the former US clientele of Scottish Re
US. In this context the retention limit of Hannover Life Re for
US business was also increased to USD 10 million. These efforts
proved successful in numerous instances, and for many
sizeable US primary insurers HLR America thus ranks for the
first time among the group of obligatory life reinsurers. The
market share for new business is in the range of 4% – 5%; we
consider our goal of obtaining a market share of at least 10%
in the medium term to be attainable.
In addition, we have developed special expertise for alternative
distribution channels in South Africa, most notably direct
sales and Internet sales. It is our expectation that not only in
South Africa will these distribution methods help to provide
large parts of the rural population with suitable life and health
insurance products for the first time.
The premium income of HLR Africa showed vigorous growth
of 35.3%, in part due to the strength of the South African
rand; it totalled EUR 149.5 million (EUR 110.5 million). The
underwriting result remained good. This produced an operating
profit (EBIT) of EUR 11.9 million, corresponding to an
EBIT margin of 9.5%.
44 Management report Life and health reinsurance
Hannover Re Group annual report 2010