Life and health reinsurance
The life and health reinsurance business group combines under the worldwide Hannover Life Re brand the international activities of the Hannover Re Group in the life, health, annuity and personal accident lines (the latter only insofar as they are transacted by life insurers). The strategic emphasis is on building long-term, directly acquired customer relationships that can generate discernible value-added for our cedants in risk and financial management.
The repercussions of the worldwide financial market crisis, which became especially apparent on an enormous scale in the second half of the year under review, also affected the operating result of Hannover Life Re. On the underwriting side, we did not observe any changes in the claims experience for the biometric risks, and there were also no unusual developments affecting structural risks - such as the persistency of the business in force and the counterparty risk associated with ceding companies.
+++ Hannover Life Re ranks among the four most important internationally operating life reinsurers +++
Turning to the investments side, our life subsidiaries in the United States and Ireland took particularly heavy charges on account of the fair value adjustments made for reinsurance funds deposited with US cedants. These adjustments (prompted by the so-called DIG B36 provisions of FAS 133) reached a record level of EUR 72.1 million - in particular due to the substantial widening of risk premiums on corporate bonds in the course of the year - and were charged to the operating result (EBIT) accordingly. It should, however, be noted that from today's perspective this involves unrealised losses that may be significantly reduced over the remaining term depending upon movements on capital markets.
We appreciably strengthened our international market position in the year under review, with systematic expansion in the important threshold markets of Asia and Latin America playing a key role. Despite adverse effects of movements in the exchange rates of all major currencies relative to the euro, we enlarged our premium income and currently enjoy a global market share of 10% to 12%. Indeed, we rank first or second in a number of significant markets. In the worldwide arena Hannover Life Re is one of the four most important life and health reinsurers and is distinguished by its excellent rating and global presence.