Hannover, world’s third largest reinsurer, has said all in all, 1 January the renewal season passed off successfully for the company
The treaty renewals as at 1 January 2018 were shaped by the very substantial natural catastrophe losses of 2017, which took a heavy toll on the results recorded by reinsurers. After several years of declining reinsurance prices, reinsurers consequently aim to push the overall price level higher.
"Even though this result falls short of the previous year's figure, it can nevertheless be considered satisfactory if we bear in mind that 2017 was dominated by natural catastrophe events which caused insured losses substantially in excess of USD 100 billion.In the negotiations we were able to obtain the necessary price increases, expand strategic cooperations and enlarge our shares, thereby generating further growth in many lines of business," said Ulrich Wallin, Chief Executive Officer of Hannover Re, commented.
The excess supply relative to demand meant that rate rises generally remained on the moderate side, as a consequence of which it was still not always possible to secure prices that were commensurate with the risks. Despite this, the rate quality in the reinsurance market improved as at 1 January 2018. As a result, significantly more favourable business opportunities presented themselves to Hannover Re – as one of the leading players in the reinsurance market – than had been the case in the previous year, said Hannover Re.
"The outcome of the treaty renewals puts in place a solid platform for achieving the goals that we have set for 2018", . Wallin emphasised.
Premium growth was particularly marked in Asia and the United Kingdom. Attractive opportunities to expand the portfolio also opened up in North America, the Caribbean and Eastern Europe as well as in the areas of financial solutions and cyber risks. Despite the pleasing development in property and casualty reinsurance, the profitability of the treaties still takes precedence over pure premium growth.
The competitive climate was broadly unchanged across the markets of the Asia-Pacific region. Hannover Re was able to maintain a stable position in the various markets; significant expansion was even possible in China thanks to a large-volume transaction. In addition, Hannover Re wrote a substantial share in a proportional reinsurance programme in Australia, hence resulting in appreciable premium gains in this region. Altogether, the anticipated premium income in the Asia-Pacific region grew by 57 per cent.
The large losses incurred in natural catastrophe business gave a corresponding boost to prices: increases were obtained under both loss-impacted and claims-free programmes, although they did not entirely live up to market expectations. Hannover Re enlarged its premium volume in total natural catastrophe business by 7.0 per cent.
In structured reinsurance the demand for reinsurance solutions offering solvency relief was once again exceptionally pleasing. Hannover Re booked substantial premium growth of 53 per cent here.
In total, the business line global reinsurance recorded significant premium increases of 35.3 per cent.
Guidance for 2018
Hannover Re is looking to the 2018 financial year with optimism. The company is very well placed to act on opportunities in the course of the current year. Further price increases should be attainable in subsequent rounds of renewals within the year in view of the elevated claims activity.