The North American (re)insurance market is the largest single market both worldwide and for Hannover Re.

In the primary sector premium income grew appreciably for the first time since 2006. Such a trend reversal was also sorely needed by many clients, since it was only possible to generate below-average returns on equity owing to both the claims experience and the reduced investment income booked on account of low interest rates. The rate increases were most marked in industrial property business and workers’ compensation insurance. Yet positive tendencies could also be discerned in the year under review in segments that had performed particularly unsatisfactorily in recent years, such as general liability and directors & officers (D&O) covers.

Nevertheless, the rate rises did not suffice to bring about an adequate level of profitability in the short term. Consequently, 2012 will again need to see further rate increases across the board before the situation can be described as adequate. It is, however, important not to overlook the fact that casualty prices in original business were still on a significantly higher level in 2011 than in the soft market years from 1998 to 2000.

On the reinsurance side, too, the premium volume in North America grew appreciably in the year under review. This can be attributed inter alia to a substantial number of major losses as well as the updating of the RMS loss simulation model.

Against this backdrop Hannover Re – which in North America writes its business through brokers – boosted its premium income in the original currency by 6% in the year under review; our expectation last year had been just 1%.

In view of our excellent credit rating and our standing in the market we are a valued partner among our clients, who therefore attach considerable importance to the fact that almost all their casualty placements are submitted to our company. At the same time, our clients also appreciate our broad product range and our willingness to participate in all lines as long as the price is adequate.

With a view to further diversifying our portfolio we again scaled back the share attributable to larger cedants in the year to review, while at the same time expanding our business relationships with mid-sized regional players. This business segment already accounts for significantly more than 20% of our total portfolio in North America.

We consciously did not enlarge our market share in the year under review because the price level – especially in the casualty sector – was still not sufficiently appealing. Nevertheless, thanks to our positioning we are able to increase our shares at any time if prices and conditions move towards a hard market phase.

As in the preceding years, the hurricane season passed off moderately in 2011. Only hurricane “Irene” caused appreciable loss expenditure, costing our company around EUR 26 million. The series of tornadoes in April led to a strain of some EUR 15 million for our account. In May a tornado destroyed virtually the entire town of Joplin, with a death toll of more than 100. The resulting major loss for our company amounted to roughly EUR 41 million. Along with these catastrophic events, a number of sizeable individual property claims – including for example damage to an oil production facility in Canada – were recorded.

The major loss expenditure for our business in North America was higher than in the previous year, causing the underwriting result to deteriorate. The combined ratio amounted to 110.8% after 101.0% in 2010.