01 Gothaer Konzern_E_09_Umschl - Gothaer Allgemeine ...

Management Report
In view of falling sales figures and reduced payroll expenses, we anticipate decreases in
premium income (premium shortfalls) in lines of insurance where premiums are based on
turnover. These include liability, marine and, to a certain extent, property consequential
loss insurance. Because of reporting delays, the real impact of this development will not
be felt until 2010. Investments may also be postponed, so impacts on turnovers are also
anticipated here.
Premium income is therefore expected to fall in corporate client business, especially in
the liability segment, which is our largest single line of insurance. We will counteract this
development with various profit-oriented measures, such as more intensive client
bonding and a policy of non-engagement in highly exposed risks.
The focus continues to be on medium-scale corporate client business. Market positioning
– especially for renewable energy and multiple-risk product business – will be
further enhanced in the medium term.
In the private client segment, we anticipate impacts due to persistent price competition
and market saturation. As in 2009, this development will be boosted significantly again
in 2010 by competition in private automotive business.
A strategy of “Growth with Safeguards for Required Earnings” is pursued in the private
client segment by adhering to a systematic underwriting policy and ensuring constant
portfolio management. At the same time, we continue vigorously to pursue a dual product
and price strategy. In each line of insurance, we set out to offer a basic product that is
priced to be well to very well positioned in ratings and test reports. We are also adding a
new accident product to our range of premium products, which offer high performance
solutions for the client.
We also operate as a direct insurer in the Property/Casualty segment under the ASSTEL
brand. In 2010, we expect the direct insurance market to grow faster than the market as
a whole. The number of people using the Internet for consumer purchasing is steadily
growing.
The “Xynthia” storm toll will impact on the underwriting results of the industry in the
financial year 2010. The earnings of the Gothaer Group in the Property/Casualty segment
will not be significantly affected.
With underwriting results recessive and investment result largely constant, net profit in
this segment in 2010 and 2011 is expected to reach a level that can be described as
sound, especially against the backdrop of the economic and financial crisis.
88 Gothaer Group Annual Report 2009