January 2012 renewals are looked upon with optimism by reinsurer E+S Rück, which bears responsibility for German business within the Hannover Re Group.
“The claims situation and the prevailing uncertainties on financial markets – together with the associated challenge of generating sufficient investment income – should promote considerable discipline on the technical pricing side”, Michael Pickel, Member of the Executive Board, stated at a press conference in Baden-Baden. “We anticipate stable conditions overall, and allowing for the current financial climate this means that the profitability requirements in the portfolio can be maintained.”
The picture in the individual lines of business is a mixed one: industrial property and casualty business, for example, is the scene of fierce competition. Price erosion in the original business is expected above all in property insurance. With this in mind, the company intends to write its business highly selectively. On the casualty side, by contrast, stable rates are to be anticipated.
In motor business – an important line for the company – stable reinsurance conditions are to be expected on the liability side; this is based on the assumption that premium income will rise. In own damage business the natural hazards events of August and September coupled with claims from prior years have led to high loss ratios, as a consequence of which price increases are to be anticipated.
The accumulation of natural disasters and the planned implementation of Solvency II will likely be reflected particularly prominently in rates for catastrophe covers. “It is our assumption that clients will reconsider the scope of their coverage and purchase additional capacities”, Pickel noted. Prices should trend upwards on the back of the current claims expenditures and those of previous years. The latest model adjustments made by the provider RMS will probably also have an impact here.
Renewable energies offer vast potential for reinsurers. Complementary to traditional insurance products, E+S Rück offers its clients energy saving warranties as well as protection against weather-related losses of revenue and profit. The company intends to respond to customer demand by further expanding its range of products and services. “We are working together with our partners on solutions designed to safeguard the insurability of energy-efficient technologies”, Pickel emphasised.
All in all, E+S Rück again sees attractive business opportunities for the 2012 financial year and is looking to generate further profitable expansion of its already large market share.
Source : Hannover Re Press Release
