01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

Outlook
General economic outlook
Gothaer Group
Property/Casualty segment
General situation
Outlook
Management Report
Despite the gradual economic recovery, the economic environment remains difficult for
the German insurance industry in 2010. Growth estimates for the year at present are
between 1 % and 2 %. As a result of sustained high unemployment and growing inclination
to save, private household demand is expected to play a particularly active role
in slowing down the recovery process and presenting insurers with major challenges.
The future development of the Gothaer Group will be largely defined by its core fields of
business, i.e. the Property/Casualty, Life and Health segments. Because these segments
have both shared and separate environments, the prognosis in terms of opportunities
for future development is made on the basis of these segments.
Despite the moderate economic growth anticipated and the consequent stabilization of
the German economy, the sharp downturn in economic performance in 2009 is expected
to impact on the development of premiums within the insurance sector in 2010. The scope
for growth in non-life insurance is limited in equal measure by price competition – which
has been at a ruinous pitch in some lines of insurance for years – and high market
saturation. Overall, premium revenues from property/casualty insurance are forecast to
be 0.5 % lower in 2010 than last year.
Once again, the downturn in automotive insurance – the largest line in the Property/
Casualty segment – will be sharper than in the market as a whole. After a fall of –1.5 % in
2009, premium volume here is expected to contract by –1.0 %. This is due to waning
demand and migration to more favourable no-claims categories coupled with prices that
are tending to stagnate.
In the light of economic developments, premium revenues in industrial and commercial
property and liability insurance are expected to decline. Policies with premiums based on
turnover (liability, consequential loss and marine policies) will particularly be affected
here. Positive premium growth is anticipated in private property insurance and legal
expenses insurance, making private households a major source of premium income for
property/casualty insurers in 2010.
The consequences of the economic and financial crisis will have a dampening effect on
the development of property/casualty premiums in 2010. For example, the larger number
of insolvencies in Germany could increase client loss. A reduced inclination to invest on
the part of clients will also present an obstacle to growth. Moreover, a change in purchasing
behaviour can be observed among our clients, especially in lines such as marine
or engineering insurance.
Gothaer Group Annual Report 2009 87