E+S Rück – which bears responsibility for German business within the Hannover Re Group – considers the general environment on its domestic market to be broadly favourable. Michael Pickel, Member of the Executive Board, stated at a press conference in Baden-Baden: “Although conditions remain difficult in some lines, including for example motor business, I am nevertheless confident that we shall again maintain our profitability in the coming year.”
For 2011 the company expects both market conditions and the premium trend to remain largely stable. Looking at the various lines of business, the picture that emerges is a mixed one. In industrial property business the pressure on prices will be sustained. This can be attributed in part to volume lost in the aftermath of the recent economic crisis, most notably in the area of business interruption. In view of the fiercely competitive climate E+S Rück intends to write its business highly selectively.
Sustained competition can also be observed in motor business, an important line for E+S Rück. Following premium declines and an unusually severe winter with an adverse claims experience, the company nevertheless expects that the premium erosion will be largely halted in 2011. Given the results on the primary market in 2010 and the reduced interest rate level, conditions in reinsurance are likely to improve.
In industrial liability business the climate remains intensely competitive on the primary insurance side. The prospects for reinsurers, on the other hand, are more encouraging: given the importance of a very good rating for reinsurers, the capacities available in the market will inevitably remain limited. E+S Rück assumes that prices and conditions here will be commensurate with the risks.
In light of this year’s natural disasters, such as winter storm Xynthia and a number of flood events, E+S Rück expects prices for catastrophe covers to harden. “With an eye to the upcoming round of treaty renewals our clients will reconsider their exposures on account of the recent flood losses. It is our assumption that additional capacities will be purchased”, Mr. Pickel noted.
All in all, E+S Rück is again looking to attractive business opportunities in 2011 and hopes to continue the profitable expansion of its market share.
Source : Hannover Re Press Release
