Germany
Within the Hannover Re Group the German market is served by our subsidiary E+S Rück. As the “dedicated reinsurer for Germany”, the company has been a sought-after partner for decades thanks to its good rating, pronounced customer orientation and the continuity of its business relations. E+S Rück is superbly positioned in our domestic market and continues to rank as the number two in Germany – the world’s second-largest non-life reinsurance market. It even ranks first in the reinsurance of motor business.
Property/casualty insurance in Germany continued to expand in 2012. This pleasing growth was driven principally by motor insurance, which showed a gain of around 5% after years of premium erosion. Nevertheless, the property insurance lines also posted appreciable growth, boosted in particular by comprehensive homeowners insurance. General liability lines, on the other hand, were under considerable competitive pressure – especially in commercial and industrial business.
The loss experience in the year under review was considerably less troubled than the previous year. In the absence of large natural perils events, such as the hailstorms of 2011, motor own damage insurance saw an appreciable decline in the number of claims. This factor, in conjunction with the premium hikes that were obtained, served to improve the combined ratio, although it is still not adequate. The situation in motor liability insurance was more favourable: including the run-off of claims from prior years, it was possible to bring the combined ratio here back below 100% for the first time. While the average expenditure per claim was higher at around EUR 3,500, this increase was significantly less than the rise in premium.
The industrial property insurance lines were again the scene of fierce competition in the year under review. In addition, sizeable major losses were incurred in the chemical industry, which appreciably impacted industrial fire and fire loss of profits insurance. A number of mid-sized fire losses were also reported.
Contrary to the stagnant premium volume in the market as a whole, the personal accident insurance business in our portfolio posted vigorous growth, as a consequence of which we were once again highly satisfied with the development of this line. In this area we offer our cedants not only reinsurance covers, but also services such as training programmes and a Web-based version of our accident manual – thereby enabling clients to extensively finalise the processing of applications at the workplace or even at point of sale. Not only that, we offer comprehensive services for the management of bodily injury claims as well as enhanced accident products on the pricing side.
The claims situation in the engineering lines was satisfactory in the 2012 financial year. Despite its highly international orientation overall, engineering business is exhibiting growing potential domestically too – especially in the field of renewable energies: we work together here with our partners on solutions that enable the insurability of energy-efficient technologies. Through our cooperation with a primary insurer we have brought to market covers against weather-related losses of revenue and profit; target customers for these products include the construction sector, regional energy suppliers and the automobile industry. Given the changing energy policy in Germany, the (re)insurance of wind farms will also play an ever greater role; this is true not least of highly complex offshore wind farms. Our premium volume in this new area of business is still relatively modest given the difficulty of assessing the risks.
Overall, we cemented our position as one of the leading reinsurers in the profitable German market in the year under review. Gross premium volume increased by 2.9% (6.5%), leaving us thoroughly satisfied with developments on our domestic market.