The bulk of Hannover Re’s catastrophe business is written out of Bermuda, which is considered the centre of competence for this line worldwide. Along with the expertise of our local team, our financial strength and an excellent rating have made us a particularly highly sought-after partner for ceding companies and brokers for quite some years now.

Following on from the abundance of natural disasters witnessed in 2010 – we need only recall the earthquakes in Chile and New Zealand – even heavier losses were incurred in the year under review. The devastating earthquake and subsequent tsunami in Japan, a fresh earthquake in New Zealand and flooding in Australia not only caused immense human suffering in the first quarter, they also inflicted extraordinarily high loss expenditure on the (re)insurance industry. Price increases within the year for catastrophe covers in the affected regions were correspondingly marked. Japanese earthquake covers saw prices surge by 25% to 50%. Up to 50% higher premiums were payable for catastrophe programmes in Australia, while in New Zealand prices rocketed by as much as 150% to 500%; this was also due in part to new regulatory requirements, under which insurers are required to maintain coverage for up to a 500-year event. At the same time, given the scale of the events, the decline in prices for catastrophe risks in other markets was halted. In China and Korea prices held stable, while in the United Kingdom, Latin America and the Caribbean they climbed by around 5% on average. In the United States, too, a high frequency of natural catastrophe events and above all the model adjustments made by the provider RMS led to rate increases averaging 10%.

Our strategy for underwriting catastrophe business remained largely unchanged in the year to review. Always giving due consideration to our customer relationships, we made the most of the available capacity to write profitable business. Bearing in mind the accumulation of severe natural disasters in certain regions, we redistributed our capacities in order to reduce the risk of profit erosion.

Our gross premium volume from global catastrophe business increased by 19.2% in the year under review to EUR 364 million (EUR 305 million).

The most expensive single loss for the (re)insurance industry in the year under review was the severe earthquake and tsunami in Japan, the cost of which is put at around USD 35.5 billion. This event gave rise to a burden of losses for Hannover Re’s net account of EUR 228.7 million. The February earthquake in Christchurch, New Zealand, resulted in a loss of EUR 121.4 million for our company. The hurricane season, on the other hand, again passed off relatively unremarkably in 2011; only Hurricane Irene caused comparatively moderate expenditure of around EUR 25.9 million. A list of all catastrophe losses and major claims in 2011 is provided in section Risk landscape of Hannover Re .

Owing to the substantial loss burdens, the result fell short of the previous year. The combined ratio for global catastrophe business came in at 119.4% and thus improved slightly on 2010 (121.3%).