01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...
01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...
01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...
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Property/Casualty segment<br />
General risk situation<br />
Private client business<br />
Management Report<br />
In addition, appropriate reinsurance treaties are in place to limit the risks arising from<br />
major and accumulation losses.<br />
For the individual Group segments, this means:<br />
Our operations are differentiated by target group into private and corporate client<br />
business. The possible impacts of the financial crisis are analyzed and assessed on a<br />
continuous basis. Where bank credit dries up, the implications for our corporate client<br />
target group are wide-ranging – from increased insolvency through reduced inclination<br />
to invest to generally cautious purchasing behaviour. Insolvency leads to loss of client<br />
accounts, a lack of willingness to invest and purchase and the absence or decline of<br />
demand for insurance cover and, as a consequence, a tendency towards diminishing<br />
premium revenues. The sharp drop in revenues registered by some of our industrial<br />
clients resulted in premium income downturns even in 20<strong>09</strong>, especially in liability<br />
insurance. In 2<strong>01</strong>0 at the latest, however, reduced revenue figures and lower payroll<br />
expenses will lead to diminishing premium income from lines of insurance where premiums<br />
are based on annual turnover. These lines include liability, marine and property<br />
insurance. Engineering insurance and property insurance will also be affected by the<br />
anticipated downturn in inclination to invest. In fleet insurance, investment in more<br />
economical vehicles or the absence of any new investment will impact on insurance<br />
cover and premium income. These negative impacts, which were more than compensated<br />
by new business in 20<strong>09</strong>, will leave visible marks on premium income figures in<br />
2<strong>01</strong>0. This has been taken into account in planning for the current financial year.<br />
The poorer economic climate will also impact on private client business, although to a<br />
lesser extent.<br />
Furthermore, the general risk situation is being reshaped by changes in the legal<br />
environment. <strong>Gothaer</strong> is not affected by the recent court rulings on the validity of instalment<br />
surcharges. However, there is a risk that leading supreme court rulings will be<br />
delivered on this issue in the future.<br />
Private client business continues to be marked by high price sensitivity and a pronounced<br />
readiness to change providers on the part of policyholders. Sustained extreme<br />
price pressure and a high degree of market saturation are also evident. <strong>Gothaer</strong> offers<br />
comprehensive, high-value-for-money insurance solutions to counter this market trend.<br />
In private automotive insurance, <strong>Gothaer</strong> again refrained from participating fully in the<br />
price competition that has become ruinous in some areas of business; it markets a<br />
product pitched at an adequate price, committing to profit even at the expense of market<br />
share. As in previous years, the quality of the portfolio continues to be improved by<br />
effective portfolio management. Private automotive insurance on the whole is thus well<br />
positioned to meet the upcoming developments in the market.<br />
<strong>Gothaer</strong> Group Annual Report 20<strong>09</strong> 63