Hannover Re satisfied with 1 January treaty renewals in non-life reinsurance
(Thomson Reuters ONE) - Hannover R?/ Hannover Re satisfied with 1 January treaty renewals in non-life reinsurance processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. Hannover Re satisfied with 1 January treaty renewals in non-life reinsurance· Steady demand for reinsurance· Modest premium growth for 2010· US property business satisfactory· Rate increases in aviation and credit/surety· Expected rate reductions in catastrophe business owing to reduced majorloss expenditure in 2009· Return on equity target for 2010:at least15%Hannover, 3 February 2010: The treaty renewals in non-life reinsurance effective1 January 2010 passed off in line with Hannover Re's expectations. "Rates andconditions broadly held stable, and we are therefore not dissatisfied with theachieved results. Slight pressure on prices was to be expected after theparticularly good 2009 financial year", Chief Executive Officer Ulrich Wallinexplained.While modest rate erosion was recorded in some property lines, price increaseswere pushed through in other segments. The latter was true of aviation business,and was again the case in credit and surety reinsurance. The treaty renewals inGermany proved more favourable than anticipated.Of the total premium volume of EUR 4,377 million written in non-life reinsurancein 2009 (excluding facultative business and structured covers), a goodtwo-thirds of the treaties worth altogether EUR 2,976 million (68%) were up forrenewal as at 1 January 2010. Of this, a premium volume of EUR 2,714 million wasrenewed, while treaties worth EUR 263 million were either cancelled or renewedin modified form.Including increases of EUR 394 million from new or modified treaties and thanksto improved prices in some areas, the total renewed premium volume thus came inat EUR 3,108 million. Making allowance for treaties with a later renewal date,gross premium in non-life reinsurance is likely to surpass the previous year'slevel at EUR 4,530 million (+3.5%).Renewals in non-life reinsurance in North America were gratifying overall.Property business saw satisfactory prices, with rates for proportional treatiesremaining on a good level. In non-proportional business rates for the most partheld stable, and in the casualty sector further premium erosion was averted.Business in Germany fared better than expected. In motor liability, an importantsector for Hannover Re, rate increases averaging 5% were secured undernon-proportional treaties. "This year we were again able to expand our largemarket share in Germany through new client relationships and hence consolidateour position as one of the leading reinsurers in the profitable German market",Mr. Wallin noted.The renewals in aviation business were satisfactory, with rate increases in thelower double digits obtained virtually across the board. Hannover Re stepped upits acceptances with the major airlines. Rates in the general aviation sectorwere stable on a low level, whereas in space business - following on the heelsof a profitable experience in 2009 - they came under pressure. For the currentfinancial year Hannover Re expects to see rising premium income for the entireaviation portfolio.Hannover Re is also satisfied with the outcome of the renewals in credit andsurety business. Despite the growing availability of capacity on the market, thecompany achieved rate increases sometimes running into double digit percentagesand extended its market position. Increases were booked primarily in creditreinsurance.The global reinsurance picture was a mixed one. In France rates were largelystable, while in the Scandinavian markets Hannover Re scaled back itsacceptances in light of insufficient rates. The renewal season in Central andEastern Europe gave grounds for satisfaction on account of stronger demand. Theretakaful segment, in which the premium volume was further boosted, similarlydelivered a gratifying development. All in all, Hannover Re is satisfied withthe renewals in worldwide treaty business.In worldwide catastrophe business prices for reinsurance covers slipped back asexpected owing to the relatively unremarkable catastrophe loss experience andthe improved capital resources of primary insurers. Rate reductions wereespecially marked in the United States, although it was possible to achieveprice increases for loss-making programmes in some regions. Owing to themoderate strains incurred in Europe in 2009, rates here remained for the mostpart stable.The treaty renewals again demonstrated that the financial strength of reinsurerscontinues to be of great importance to ceding companies. A top rating is aprerequisite for a reinsurer if it is to be offered and awarded the entirespectrum of business. With its excellent ratings ("AA-" from Standard & Poor'sand "A" from A.M. Best) Hannover Re is one of the reinsurers that meets thisrequirement.Outlook for 2010In view of the satisfactory treaty renewals as at 1 January and thepredominantly favourable state of the market, Hannover Re is looking to a goodfinancial year in non-life reinsurance - despite the pressure on rates inproperty business. Modest increases in premium income coupled with healthyprofitability are anticipated for 2010.Assuming that the burden of major claims and catastrophe losses remains withinthe expected bounds and as long as there are no sharp downturns on capitalmarkets, a return on equity of at least 15% is targeted for the current year. Asto the dividend, Hannover Re still anticipates a payout in the range of 35% to40% of its IFRS consolidated net income after tax.For further information please contact:Press and Public Relations / Investor Relations:Karl Steinle (tel. +49 511 5604-1500,e-mail: karl.steinle(at)hannover-re.com)Press and Public Relations:Gabriele Handrick (tel. +49 511 5604-1502,e-mail: gabriele.handrick(at)hannover-re.com)Investor Relations:Klaus Paesler (tel. +49 511 5604-1736,e-mail:klaus.paesler(at)hannover-re.com)Please visit: www.hannover-re.com
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Datum: 03.02.2010 - 08:00 Uhr
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