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Non-life reinsurance


Market developments in the non-life reinsurance have been broadly satisfactory so far, although competition has intensified sharply in the current financial year. The greater competitive intensity can be attributed above all to the fact that sufficient capacity is generally available in the market, as a consequence of which the supply of reinsurance protection – especially in mature markets – exceeds demand. A further factor here was the move by many ceding companies to retain more business for net account. The situation is different in many emerging markets, where demand for reinsurance covers is rising on the back of increased business in the primary sector.

We were satisfied with the renewals as at 1 January 2013, when around two-thirds of our treaties in non-life reinsurance (excluding facultative business and structured reinsurance) were renegotiated. Although the environment was considerably more competitive than in the previous year, our selective underwriting approach enabled us to attain a price level at least equivalent in quality to the good year of 2012. In the more profitable non-proportional sector we generated pleasing growth of 6%. Proportional business, on the other hand, contracted slightly.

Although prices declined in markets and lines that had suffered few losses in 2012 – such as aviation –, the business is still profitable. In regions and lines that had incurred significant losses, it was possible to push through sometimes appreciable price increases. The most substantial hikes were obtained in marine reinsurance: in view of the losses from the wreck of the “Costa Concordia” cruise ship as well as from Hurricane Sandy, rates in marine business moved sharply higher under both loss-impacted programmes and those that had been spared any loss expenditures. We also booked further sizeable price increases for non-proportional motor liability covers in the United Kingdom.

The development of our North American portfolio was very pleasing, although in US casualty business there was a noticeable trend towards clients ceding less and less business to reinsurers.

We see growth potential in Latin America, the countries of Central and Eastern Europe and in business with agricultural risks.


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