Non-life reinsurance

The renewals as at 1 January 2010 – the date on which a good two-thirds of our treaties were renegotiated – passed off largely in line with expectations. We are satisfied with the achieved results. Insurers and reinsurers alike have overcome the repercussions of the financial market crisis rather quickly and for the most part rebuilt the lost capital. Sufficient capacity was therefore available, and prices broadly held stable. They even softened slightly in lossfree segments; rate increases were observed in lines that had seen heavy losses, such as aviation reinsurance.

That prices largely remained stable is a reflection of the underwriting discipline practised among reinsurers. Given that the returns obtainable on investments are lower on account of the reduced interest rate level, greater attention is now directed towards the underwriting result. We anticipate that a combined ratio of less than 97% is attainable in non-life reinsurance for 2010, provided catastrophe losses remain within the bounds of our assumptions.

In our acceptances we concentrate particularly on segments in which risk-adequate premiums can still be obtained or where prices are rising. The latter is especially true of aviation as well as credit and surety reinsurance. In light of the equity requirements arising out of “Solvency II”, reinsurance is taking on even greater significance as a tool for insurers – and we therefore anticipate modest growth in premium income.

In the course of the renewals it was again evident that our clients attach considerable importance to the ratings of their reinsurers; this applies above all to the underwriting of long-tail casualty business. In this area a very good rating is a necessary prerequisite in order simply to be asked to submit a quotation. Thanks to its very good ratings (“AA–” from Standard & Poor's and “A” from A.M. Best) Hannover Re is one of the reinsurers to meet this condition without reservation.