Hannover Re subsidiary expects stable prices for upcoming January 2010 treaty renewals in Germany
Baden-Baden, 26 October 2009:
On the occasion of its press lunch in Baden-Baden E+S Rück – which bears responsibility for German business within the Hannover Re Group – described the climate prevailing on the German market as largely favourable. "Conditions improved in 2009, not least due to the capacity shortage triggered by the financial market crisis. Given the current state of the primary insurance markets, these conditions should at least be maintained this year", Michael Pickel, Member of the Executive Board, explained.
For 2010 the company anticipates a mixed picture as far as reinsurance prices are concerned. In industrial property business the price decline of recent years is likely to continue. E+S Rück will write its business highly selectively in the face of a fiercely competitively environment.
In industrial liability business the company expects the competitive climate on the primary insurance market to remain unchanged. Prospects on the reinsurance side, however, are brighter: owing to the importance of a very good rating for reinsurers in casualty business, the capacities available on the market are of course limited. "It is our expectation that prices and conditions here will continue to be commensurate with the risks", Mr. Pickel emphasised.
In motor liability business, an important line for E+S Rück, the company expects rates for non-proportional covers to rise. This can be attributed in part to sharply reduced premium income in primary insurance business and also to lower investment income.
In accident reinsurance E+S Rück does not rely merely on the traditional assumption of risks, but also offers product innovations: these include, for example, a combined personal accident annuity product that represents a cost-effective alternative to disability insurance.
Mr. Pickel anticipates a stable price level in catastrophe business, adding: "The Solvency II project initiated by the European Commission could further boost demand, especially for catastrophe covers – which should have positive implications for prices".
The burden of catastrophe losses in the current year to date has been moderate relative to 2008: winter storm "Klaus" and the collapse of the Cologne City Archive cost E+S Rück a mere EUR 8 million altogether. The scale of the hailstorms recorded this year has, however, been considerable, although their relevance as losses on the reinsurance side is not appreciable.
All in all, E+S Rück – as the reinsurer for Germany within the Hannover Re Group – is again looking to attractive business opportunities in 2010 and hopes to continue the profitable expansion of its already large market share.