Life and health reinsurance

Along with the effects of developments in the global economy, another major challenge facing the insurance industry is the constant shift in the age structure. Given that people are on average living longer, the need for corresponding insurance solutions remains consistently high. In 2014 we expect that demand for competitive and innovative insurance concepts designed to provide longevity coverage will rise around the world. Based on our long-standing expertise, it can be assumed that our customers will trust us to deliver fresh stimuli and appropriate reinsurance solutions.

Life and health reinsurance: Forecast development for 2014
	Volume1	Profitability2
Financial Solutions		++
Risk Solutions
Longevity		+
Mortality		+
Morbidity		+/-
1 In EUR, development in original currency may vary 2 ++ = significantly above the cost of capital; + = above the cost of capital; + / – = on a par with the cost of capital; – = below the cost of capital

In Europe, the market is very largely saturated when it comes to traditional life insurance products. In recent years an emerging shift in the target group could already be observed, and in 2014 too we expect the primary market to cater increasingly to the needs of seniors. There will likely be no easing in the considerable pressure to deliver competitive, cost-efficient and innovative products which focus on the needs of the over-sixties. If growth is to be generated, new products must be designed and existing product ranges expanded. In this context the primary emphasis will doubtless be on the biometric risk of morbidity, such as in long-term care insurance. Even if Germany is considered in isolation, an attractive return cannot be anticipated for traditional life insurance in the coming years.

In 2014 we shall pay close attention to the Asian market and expect demand for financially oriented reinsurance solutions to remain strong. It may be assumed that the consistently growing urban middle class will continue to take a closer interest in health coverage and retirement provision.

In the United States we anticipate further contraction in the risk-oriented life reinsurance market. We are nevertheless cautiously optimistic that we can again enlarge our market share in 2014. Furthermore, it is our expectation that effective portfolio management will be a success factor in this business segment going forward and will hence take on growing importance.

In addition to offering protection for biometric risks, we are also working on the assumption that primary insurers will have an increasing need for service offerings in 2014. In our assessment, an efficient combination of coverage for biometric risks and resource-saving processes will be reflected in stronger demand.