Traditional reinsurance

We are broadly satisfied with the business that we write in the United Kingdom and on the London market. Despite challenging conditions, we succeeded in preserving the rate level for our treaty portfolio. Even though prices in motor business climbed in the year under review, they are still not yet commensurate with the risks in some areas. In light of this, we maintained our premium volume in the United Kingdom on a stable level.

Direct business

Through two of our subsidiaries, International Insurance Company of Hannover Ltd. (Inter Hannover) in the United Kingdom and the South African company Compass Insurance Ltd., a subsidiary of Hannover Re Africa, we write direct business that complements our principal business activity as a reinsurer. This essentially involves acceptances concentrated on tightly defined portfolios of niche or other non-standard business.

The tense state of the economy in the UK caused the premium income booked by leading insurers to contract in the year under review. Particularly hard-hit were covers for risks in the construction industry. Overall, competition was fierce – especially in the professional indemnity lines. Market conditions for individual occupations varied widely, however. Rate increases were obtained, for example, under policies for the legal professions.

Following on from marked rate rises in the previous year, premiums in motor business surged again in the year under review – prompting us to enlarge our premium volume. In industrial property business our involvement is concentrated on mid-sized clients, since in these cases we are better able to play a part in structuring the programmes. Neither the frost damage nor the civil unrest witnessed in London and some other major English cities had any significant effect on our results.

Our second company writing specialty business, Compass Insurance Ltd., a subsidiary of Hannover Re Africa, is one of the leading players in this segment in South Africa. In the year under review the company again pursued its strategic objective of expanding profitable business with underwriting agencies. Despite a competitive environment we successfully accomplished this aim – thanks not least to our market position. This business, which encompasses virtually all areas, is reinsured in large measure by Hannover Re Africa.

We were able to substantially enlarge our premium volume from direct business in the year under review. Our increased involvement in the UK motor sector was a contributory factor in this regard. Yet the premium volume that we write in South Africa also showed further growth in the year under review. Not only were we able to extend our activities in direct business regionally, we also moved forward with establishing our new products in the market – for example the insurance of energy-saving warranties in the United States.