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Our business opportunities and risks

Non-life reinsurance

Irrespective of statements made regarding individual markets in non-life reinsurance, it should be noted that the probabilities of occurrence for (natural) catastrophe events in terms of their number and scale as well as their magnitude for the insurance industry are subject to considerable fluctuations.

The 2011 financial year was overshadowed by a large number of natural disasters, which resulted in significant loss expenditures for the insurance and reinsurance industry. It was striking to note that sizeable loss burdens also resulted from disasters that could not be modelled or could only be modelled to a limited extent. It should be recognised that the risk associated with such modelling limitations will be countered with even more systematic risk management and the withdrawal of reinsurance capacities.

The sovereign debt of some member countries of the Single European Currency and the low interest rate level in 2011 caused investment income to come under pressure. In some major insurance markets it was necessary to eliminate reserve redundancies in order to achieve earnings targets. These effects serve to ratchet up even further the demands placed on a profit-oriented underwriting policy, which is reflected in an increased price level. Considerable uncertainties remain when it comes to estimating the number and amount of possible insolvencies that could take a toll on the credit and surety lines.

Further growth opportunities will derive from changes in natural hazards models for the main perils in the United States and Europe as well as from demand prompted by Solvency II requirements. Similar considerations relating to capital resources and an associated rise in demand patterns can also be observed in emerging markets.


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