Northern Europe
We strive to play a leading role in the markets of Northern Europe, especially in the segment of mutual insurers. In general terms, we prefer client relationships that are geared to the long term. In cases where we do not consider loyalty considerations a relevant factor, we write our business opportunistically.
+++Consequences of financial market crisis in Northern Europe have no adverse effects+++
The intense competition prevailing on Nordic markets continued unabated in the year under review. It can, however, be assumed that the downward slide in rates in original business bottomed out in 2008. Conditions on the reinsurance market were highly competitive, especially with regard to covers for catastrophe, property and personal accident business. Only in the casualty sector did prices hold stable, prompting us to make more capacity available in these lines.
Denmark launched a new insurance product on the market in the year under review in the form of liability coverage for latent construction defects. For new building projects it must now be demonstrated that such a policy has been taken out at the time of applying for a construction permit. We expect this regulation to generate attractive new business opportunities.
Insurers in Northern Europe, in common with players in other markets, had to take heavy write-downs as a consequence of the financial crisis - with Iceland being particularly hard hit. The nationalisation of that country's three largest banks and the associated problems for Icelandic captives - as owners of the major insurers - are enormous issues, and the repercussions of these developments cannot as yet be clearly grasped. It is likely that the companies will sell foreign-based insurance subsidiaries. Hannover Re does not, however, expect these circumstances to have any adverse implications for its reinsurance operations.
Premium income in Northern Europe contracted slightly in 2008. On the claims side we were thoroughly satisfied with the situation: fire claims decreased in frequency in the year under review, and our basic loss ratio in fire business therefore fell. Based on the loss information currently available, we expect a major fire claim in Finland to produce a strain in the lower single-digit millions for our account.