Reinsurer cut catastrophe book by 15%
German reinsurance group Hannover Re increased renewed premium volume by 2% in the 1 January 2011treaty renewals despite widespread softening rates.
Total renewed non-life reinsurance premium volume was €3.346bn, against the €3.282bn of treaties that were up for renewal.
“The renewals passed off better than expected for our company,” said Hannover Re chief executive Ulrich Wallin in a statement. “Despite softening tendencies in the market, we achieved broadly stable rates and conditions and are therefore thoroughly satisfied with the outcome. In certain segments, such as offshore energy business and European motor liability, we were even able to push through price increases.”
Hannover Re’s 2% increase contrasts with the 16% decline in renewed premium volume reported by Bermuda-based reinsurer PartnerRe last week.
Hannover Re is also expecting its total renewed non-life premium volume for the year, excluding facultative and structured reinsurance, to be up 1.8% over last year’s. Making allowance for treaties with a later renewal date and assuming constant exchange rates, the reinsurer estimates the year’s total will be €4.954bn against last year’s €4.867bn
While Hannover Re detected falling rates in non-loss hit areas, it experienced rate increases in several areas and was able to write more business as a result. The reinsurer expressed particular satisfaction with its 5% increase in German non-proportional motor business, for example. It also reported a 20% premium volume increase in offshore energy business as a result of the Deepwater Horizon oil rig loss, and a 14% volume increase in aviation business.
However, the reinsurer made an 11% cut in its credit and surety book volume, and wrote 15% less catastrophe business. “In worldwide catastrophe business prices for reinsurance covers for the most part retreated. Rate reductions were particularly marked for US risks,” the company said. However, it noted that rates had risen in loss-hit areas, and prices in Chile in particular went up by 40%.