HANNOVER Re broadly satisfied with outcome of 1 January treaty renewals

12 February 2015 —
Hannover Re is largely satisfied with the outcome of the treaty renewals as at 1 January 2015 in light of the challenging business environment, even though the rate quality of the renewed portfolio fell short of the previous year. "The price decline in many markets was significant compared to the previous year. Thanks to our good rating and long-standing customer relationships we nevertheless achieved a rather pleasing outcome. Despite our systematic selective underwriting policy we were able to keep our portfolio stable", Ulrich Wallin, Chief Executive Officer of Hannover Re, explained. German and US business held up especially well in this renewal season.

The treaty renewals were particularly notable for a clear trend towards increased retentions carried by ceding companies. This was due to the fact that market-changing major losses were again absent in 2014 and hence the capital resources of primary insurers improved still further. The inflow of capital from alternative markets (ILS) continued to put prices under additional pressure, above all in natural catastrophe business. This led to rate reductions in many areas and in some cases deteriorations in conditions. It was, however, possible to push through rate increases under programmes that had suffered losses in 2014. This was especially true of Germany. The significant losses incurred in the aviation line, on the other hand, did little to boost prices.

Of the total premium volume booked in the previous year in property and casualty reinsurance (excluding facultative business and structured reinsurance) amounting to EUR 6,179 million, roughly two-thirds of the treaties with a volume of altogether EUR 3,988 million were up for renewal as at 1 January 2015. Of this, a premium volume of EUR 3,617 million was renewed, while treaties worth EUR 371 million were either cancelled or renewed in modified form. Including increases of EUR 350 million from new treaties and - to a more limited extent - from changes in prices and treaty shares, the total renewed premium volume thus came in at EUR 4,023 million; this is equivalent to an increase of 1% at unchanged exchange rates.

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HANNOVER Re broadly satisfied with outcome of 1 January treaty renewals
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