Hannover Re is still the number three in the Australian and New Zealand non-life reinsurance market. We write the entire spectrum of reinsurance in this region. Our offerings in Australia are complemented by a primary insurance license held by our subsidiary Inter Hannover.

For Australia, and even more so for New Zealand, 2011 was a year of extremely heavy losses. Following the severe earthquake already suffered by New Zealand in 2010, the Christchurch area was impacted by another severe quake in February 2011. Further tremors were again felt in June. The losses for Hannover Re from these two events amounted to EUR 121 million and EUR 30 million respectively.

In Australia it was the flooding in Brisbane that caused particularly severe devastation. The resulting net loss for our company was in the order of EUR 54 million. Cyclone Yasi slammed into the country’s northeastern coast, although the insured losses remained moderate on account of the low insurance density. The associated strain for Hannover Re’s account was around EUR 17 million.

The immense major loss expenditure as well as reduced investment income stepped up the pressure on insurers to restore their underwriting results to profitability. What is more, some reinsurers withdrew from the market following these losses, while established players at best held stable or otherwise reduced their capacities in Australia and New Zealand. This led to increased pricing pressure and brought the anticipated significant rate hikes and improved conditions for catastrophe-exposed business. For further information in this regard please see the section “Global catastrophe business”.

With a view to optimising our diversification, we enlarged the share of our portfolio stemming from the casualty sector at the expense of the dominant catastrophe business. Prices here remained broadly stable or increased slightly.

Our premium volume grew overall in the year under review. Owing to the enormous burden of losses, the loss ratio moved significantly higher and we were therefore unable to achieve our profit targets in 2011.