"Against the backdrop of an increased number of small and mid-sized losses, we do not see any room for concessions," Dr. Michael PICKEL, a member of the company's Executive Board, commented during a press conference at the industry gathering in Baden-Baden. "Adjustments are necessary under certain treaties, for example after reserve increases. For this reason, we anticipate slightly higher reinsurance rates for the treaty renewals as of January 1, 2019."
Growing competition in motor primary insurance means that deteriorating results and a corresponding need for adjustments on the reinsurance side must be expected. Overall, in motor reinsurance E+S Ruck anticipates stable conditions for proportional treaties and rate increases in the mid-single-digit percentage range for non-proportional covers. In the matter of telematics, E+S Ruck can assist its customers with the development of pricing models and arrange access to technical solutions.
When it comes to natural catastrophe covers, E+S Ruck similarly expects a modest rate increase due to higher losses and stable rates under programs that were not impacted. Winter storm Friederike and several heavy rainfall events are unlikely to push rates higher across the board, however, because in many instances the resulting losses remained within the retention run by primary insurers. Bearing in mind the increased prevalence of natural disasters in recent years, ceding companies will probably continue to review their reinsurance requirements, and E+S Ruck therefore anticipates stronger demand for catastrophe covers.
Homeowners' comprehensive insurance, on the other hand, is still in need of remediation because past results - even in years without significant Nat Cat events - were not satisfactory market-wide. In 2018 the market will likely post another underwriting loss, despite the rate increases that have already been implemented. The same is true of industrial fire insurance, which is once again in deficit. Premium increases were scarcely observed for primary insurers, despite substantial losses over the current year.
The sustained interest in cyber insurance in Germany, especially for smaller and mid-sized enterprises, is likely to generate additional premium income. Clash covers in particular, are enjoying a surge in demand among customers. With the aid of a tariff calculator E+S Ruck is able to offer its clients individually tailored cyber solutions, inter alia through a cooperation with Perseus Technologies, a cyber security service platform that Hannover Re helped to found. Perseus provides cyber security solutions and risk management support for small and medium-sized enterprises.
E+S Ruck expects additional business opportunities to open up as further fintech players enter the German insurance market. Its focus here remains on its core competency, namely reinsurance.
In the coming year E+S Ruck is also looking ahead to management changes: effective March 1, 2019, Dr. Michael PICKEL (57) will succeed Ulrich WALLIN (63) as Chief Executive Officer of E+S Ruck. Starting January 1, 2019, Jonas KROTZEK (38) is to take over for Karsten FABER (64) as Managing Director of Germany, Austria, Switzerland, as well as Italy, and business conducted with the Talanx Group.
"We anticipate further attractive business opportunities in Germany for E+S Ruck in 2019," Dr. PICKEL noted. "It remains our goal to keep our market share at a high level and offer our clients innovative reinsurance solutions."