Development of the individual lines of business

The following section describes the development of the various lines of business. With effect from the beginning of the 2014 financial year the cooperation and exchange of business between Hannover Rück SE and E+S Rückversicherung AG was reorganised. In this context a quota share retrocession from Hannover Rück SE to E+S Rückversicherung AG in property and casualty reinsurance property and casualty reinsurance was maintained.

Fire

Total gross premium income for the fire line climbed by 20.8% in the 2017 financial year to EUR 1,963.4 million (EUR 1,625.5 million). The net loss ratio rose from 67.7% to 75.7%. The underwriting result declined to EUR -122.5 million (EUR 57.5 million). An amount of EUR 337.2 million (EUR 211.6 million) was withdrawn from the equalisation reserve and similar provisions, primarily because the lossheavy 2001 financial year was eliminated from the 15-year observation period.

Casualty

Gross premium in casualty business climbed by 9.7% to EUR 1,584.0 million (EUR 1,443.7 million). The loss ratio decreased from 78.0% to 44.3%. The underwriting result improved to EUR 349.5 million (EUR -17.4 million) in the year under review. An amount of EUR 305.1 million was allocated to the equalisation reserve and similar provisions; the allocation in the previous year had totalled EUR 190.3 million.

Accident

Gross premium income for the accident line increased by 0.7% in the year under review to EUR 336.1 million (EUR 333.8 million). The net loss ratio retreated slightly to 64.6% (64.8%). The underwriting result came in at EUR 18.0 million (EUR 22.0 million). An amount of EUR 24.9 million (EUR 20.6 million) was withdrawn from the equalisation reserve and similar provisions.

Motor

Driven by large-volume quota share treaties, gross premium income for the motor line soared by 103.8% to EUR 1,860.8 million (EUR 913.1 million). The loss ratio increased from 68.1% to 85.6%. The underwriting result closed at EUR -247.5 million after EUR 53.2 million in the previous year. An amount of EUR 60.5 million was withdrawn from the equalisation reserve and similar provisions in the year under review, following an allocation of EUR 106.5 million in the previous year.

Aviation

The gross premium volume fell by 12.8% from EUR 273.0 million to EUR 238.1 million. The loss ratio moved into negative territory at -42.7% (57.7%) due to the favourable run-off of losses from prior underwriting years and other effects. The underwriting result came in at EUR 198.6 million (EUR 39.3 million). An amount of EUR 57.1 million was withdrawn from the equalisation reserve and similar provisions in the year under review, following an allocation of EUR 23.3 million in the previous year

Marine

Gross written premium for the marine line contracted by 9.3% in the 2017 financial year to EUR 343.2 million (EUR 378.7 million). The net loss ratio increased markedly from 30.8% to 96.2%. Against this backdrop the underwriting result declined from EUR 105.7 million to EUR -35.8 million. An amount of EUR 28.6 million (EUR 86.7 million) was withdrawn from the equalisation reserve and similar provisions in the year under review.

Life

Gross premium income in the life line was stable in the reporting period at EUR 4,104.9 million (EUR 4,107.8 million). From an overall perspective, life and health reinsurance business developed broadly in line with expectations. In Europe, fulfilment of Solvency II requirements was an ever-present issue. Demand was particularly heavy in the area of longevity risks because Solvency II requires primary insurers to establish high reserves as collateral for pension obligations that are usually still in the distant future. In developing countries a steadily growing and ageing middle class led to pleasing growth, above all driving demand for critical illness covers.

Parts of the mortality portfolio in the United States performed more poorly than anticipated. This caused the underwriting result in life business for the year under review to decline overall to EUR 29.3 million (EUR 97.0 million).

Other lines

The lines of health, credit and surety, other indemnity insurance and other property insurance are reported together under other lines. Other property insurance consists of the extended coverage, comprehensive householder’s (contents), comprehensive householder’s (buildings), burglary and robbery, water damage, plate glass, engineering, loss of profits, hail, livestock and windstorm lines. Other indemnity insurance encompasses legal protection, fidelity as well as other pure financial losses and property damage.

The total gross premium volume in the other lines grew by a modest 0.7% to EUR 2,862.4 million (EUR 2,841.6 million). The net loss ratio climbed from 72.5% to 80.9%. The underwriting result closed at EUR -202.3 million following EUR -20.5 million in the previous year. An amount of EUR 37.2 million was allocated to the equalisation reserve and similar provisions after a withdrawal of EUR 9.8 million in the previous year.