Content

Font size

Non-life reinsurance

enlarge zoom

Key figures for non-life reinsurance
in EUR million 2012 + / –
previous year
2011 2010 2009 2008
1 Including expenses on funds withheld and contract deposits
Gross written premium 7,717.5 +13.1% 6,825.5 6,339.3 5,746.6 4,987.8
Net premium earned 6,854.0 +15.0% 5,960.8 5,393.9 5,229.5 4,276.7
Underwriting result 272.2   (268.7) 82.4 143.5 184.7
Net investment income 944.5 +11.7% 845.4 721.2 563.2 11.1
Operating result (EBIT) 1,091.9 +82.2% 599.3 879.6 731.4 2.3
Group net income 685.9 +50.6% 455.6 581.0 472.6 (160.9)
Earnings per share in EUR 5.69 +50.6% 3.78 4.82 3.92 (1.33)
Retention 90.2%   91.3% 88.9% 94.1% 88.9%
Combined ratio1 95.8%   104.3% 98.2% 96.6% 95.4%
Key figures for non-life reinsurance
in EUR million 2012 + / –
previous year
2011 2010 2009 2008
1 Including expenses on funds withheld and contract deposits
Gross written premium 7,717.5 +13.1% 6,825.5 6,339.3 5,746.6 4,987.8
Net premium earned 6,854.0 +15.0% 5,960.8 5,393.9 5,229.5 4,276.7
Underwriting result 272.2   (268.7) 82.4 143.5 184.7
Net investment income 944.5 +11.7% 845.4 721.2 563.2 11.1
Operating result (EBIT) 1,091.9 +82.2% 599.3 879.6 731.4 2.3
Group net income 685.9 +50.6% 455.6 581.0 472.6 (160.9)
Earnings per share in EUR 5.69 +50.6% 3.78 4.82 3.92 (1.33)
Retention 90.2%   91.3% 88.9% 94.1% 88.9%
Combined ratio1 95.8%   104.3% 98.2% 96.6% 95.4%

Accounting for 56.0% of our premium volume, non-life reinsurance is Hannover Re’s largest business group and one in which we are striving for further profitable growth. The strategy guiding our actions is active cycle management: we expand our business in individual lines if the rate situation is favourable and reduce it if we consider the prices to be inadequate.

In the non-life reinsurance renewals as at 1 January 2012 – the date when around two-thirds of our treaties in traditional reinsurance were renegotiated – we achieved better conditions and rates on average than in the previous year. Overall, the renewed premium volume grew by 6%; the increase in the comparable period of the previous year had been 2%.

The treaty renewals again showed the considerable importance attached by ceding companies to a reinsurer's financial strength. A very good rating is indispensable for a reinsurer if it is to be offered and awarded the entire spectrum of business – a situation from which Hannover Re again benefited thanks to its excellent ratings.

The most appreciable price increases were obtained, as expected, in property catastrophe business. In view of the substantial losses incurred from natural catastrophes in the previous year, prices for reinsurance covers improved markedly. Further positive adjustments followed in the rounds of renewals that took place within the year.

Non-life reinsurance: Geographical breakdown of gross written premium

Non-life reinsurance: Geographical breakdown of gross written premium (pie chart) enlarge zoom

Business in Germany fared better than expected for our company. The sustained price erosion in motor insurance was halted. The treaty renewals also passed off satisfactorily overall in our second target market, North America. In US casualty business, for example, it was possible to stop the rate erosion.

We were similarly satisfied with the treaty renewals in specialty lines. Rates in marine business were broadly stable, while increases were recorded in the offshore energy sector. Aviation reinsurance experienced rate erosion on account of good underwriting results, although the business remains attractive. In credit and surety business, too, rates declined modestly owing to the pleasing loss ratios of recent years.

In global reinsurance business we booked sizeable growth, above all in the markets of Asia and the Middle East. As planned, we enlarged our portfolio of facultative reinsurance and stepped up our writing of agricultural risks.

All in all, non-life reinsurance offered attractive market opportunities; we achieved profitable growth and extended our market share. Details of developments in the individual markets are provided on the following pages.

Hannover Re once again enabled the capital market to participate in (natural) catastrophe risks. The cover (“K” quota share), a proportional retrocession programme, was renewed with a volume of USD 350 million. This transaction complements our traditional programme of protection covers that we use to protect against peak exposures.

Non-life reinsurance: Gross written premium in non-life reinsurance

Non-life reinsurance: Gross written premium in non-life reinsurance (bar chart) enlarge zoom

The gross premium volume for our non-life reinsurance business group increased by 13.1% in the year under review to EUR 7.7 billion (EUR 6.8 billion). At constant exchange rates, especially against the US dollar, growth would have come in at 9.3%. The level of retained premium retreated slightly to 90.2% (91.3%). Net premium earned grew by 15.0% to EUR 6.9 billion (EUR 6.0 billion); growth would have been 11.4% at constant exchange rates. The increase in premium volume (at unchanged exchange rates) was thus stronger than anticipated; in our original forecast for 2012 we had anticipated growth in the range of 5% to 7%.

Unlike in the previous year, the major loss situation was comparatively moderate in the year under review. The largest single loss event for the international insurance industry – at a cost of more than USD 20 billion – was Hurricane Sandy, which caused death and considerable devastation along the East Coast of the United States. Our net strain from this event was EUR 257.5 million. Severe damage also resulted from two earthquakes in Italy, which produced a total loss of EUR 66.5 million for net account. Our marine business incurred a net loss of EUR 53.3 million from the wreck of the “Costa Concordia” cruise ship. Our portfolio of agricultural risks also suffered a large loss: the most severe period of drought in decades in the United States resulted in a net strain for our account of EUR 43.3 million. These events, together with other less sizeable major losses, combined to produce net expenditure for the year under review of EUR 477.8 million; the previous year’s figure had been EUR 980.7 million. We thus came in well below our expected level for 2012 of roughly EUR 560 million. Against this backdrop, the combined ratio improved from 104.3% in the previous year to 95.8%.

Non-life reinsurance: Major loss trend

Non-life reinsurance: Major loss trend (bar chart) enlarge zoom

The underwriting result improved sharply from -EUR 268.7 million to EUR 272.2 million. Investment income posted thoroughly gratifying growth of 11.7% to reach EUR 944.5 million (EUR 845.4 million). The operating profit (EBIT) for non-life reinsurance surged from EUR 599.3 million in the previous year to EUR 1,091.9 million as at 31 December 2012, while Group net income increased sharply to EUR 685.9 million (EUR 455.6 million). Earnings per share stood at EUR 5.69 (EUR 3.78).

In the following pages we report in detail on our non-life reinsurance business group, which is split into three segments according to the areas of responsibility on the Executive Board: target markets, specialty lines and global reinsurance.

Topic Navigation

Build your own individual report according to the topics you are interested in. Choose the topics which are essential for you.







 
show all

My Annual Report

Your page has been added successfully. Please click on "My Annual Report" in the service section to see your selection.

Link für Popup