E+S Rück – which bears responsibility within the Hannover Re Group for German business – anticipates stable or rising prices in its domestic market for the upcoming treaty renewals on 1 January 2013.
“Even though the situation in motor insurance has improved, we still see some ground to be made up in a number of lines. Along with windstorm business, the fire line is also a cause for concern in this regard”, Michael Pickel, a member of the company’s Executive Board, explained during the reinsurance week in Baden-Baden.
The stubbornly low interest rate level continues to pose a special challenge, especially for long-tail liability lines. In the face of diminished investment returns it remains the case that considerable discipline is needed on the technical pricing side.
All in all, Pickel is looking to rate increases and stronger demand for reinsurance protection on the German market.
When it comes to the individual lines of business, the picture is a mixed one. In motor insurance – which is of key importance to E+S Rück since the company is market leader in the reinsurance of this business in Germany – the positive trend should be sustained: in liability business as well as the own damage sector prices are likely to rise further on both the insurance and reinsurance side in the wake of the unsatisfactory results posted in the current cycle.
A trend reversal is needed in industrial fire/property insurance, which is notable for a high claims frequency. Business with private customers is also under strain: homeowners’ insurance is running at a chronic deficit, not least owing to the numerous frost claims incurred in this line at the beginning of the year.
In the area of catastrophe covers Pickel expects to see rising demand overall. This will be prompted by model adjustments and the more exacting equity requirements imposed on insurers by Solvency II.
E+S Rück is also enjoying continued success in the field of product design for personal accident insurance. The company has worked together with various primary insurers to create consumer-friendly protection in the form of so-called hybrid products – which also provide benefit entitlements in case of illness. “Thanks to a new automated risk assessment tool our clients are now able to reach an insurance decision even more quickly”, Pickel emphasised.
E+S Rück is again looking forward to attractive business opportunities in 2013 and hopes to generate further profitable expansion of its already large market share.
