SOURCE: Hannover Ruck

October 25, 2010 07:42 ET

Outlook for treaty renewals as at 1.1.2011: Hannover Re subsidiary anticipates stable prices in Germany

HANNOVER, GERMANY--(Marketwire - October 25, 2010) -

Hannover Rück /

Outlook for treaty renewals as at 1.1.2011: Hannover Re subsidiary anticipates stable prices in Germany

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Baden-Baden, 25 October 2010: E+S Rück - which bears responsibility for German business within the Hannover Re Group - considers the general environment on its domestic market to be broadly favourable. Michael Pickel, Member of the Executive Board, stated at a press conference in Baden- Baden: "Although conditions remain difficult in some lines, including for example motor business, I am nevertheless confident that we shall again maintain our profitability in the coming year."

For 2011 the company expects both market conditions and the premium trend to remain largely stable. Looking at the various lines of business, the picture that emerges is a mixed one. In industrial property business the pressure on prices will be sustained. This can be attributed in part to volume lost in the aftermath of the recent economic crisis, most notably in the area of business interruption. In view of the fiercely competitive climate E+S Rück intends to write its business highly selectively.

Sustained competition can also be observed in motor business, an important line for E+S Rück. Following premium declines and an unusually severe winter with an adverse claims experience, the company nevertheless expects that the premium erosion will be largely halted in 2011. Given the results on the primary market in 2010 and the reduced interest rate level, conditions in reinsurance are likely to improve.

In industrial liability business the climate remains intensely competitive on the primary insurance side. The prospects for reinsurers, on the other hand, are more encouraging: given the importance of a very good rating for reinsurers, the capacities available in the market will inevitably remain limited. E+S Rück assumes that prices and conditions here will be commensurate with the risks.

In light of this year's natural disasters, such as winter storm Xynthia and a number of flood events, E+S Rück expects prices for catastrophe covers to harden. "With an eye to the upcoming round of treaty renewals our clients will reconsider their exposures on account of the recent flood losses. It is our assumption that additional capacities will be purchased", Mr. Pickel noted.

All in all, E+S Rück is again looking to attractive business opportunities in 2011 and hopes to continue the profitable expansion of its already large market share.

E+S Rück - a subsidiary of Hannover Re - is responsible for German business within the Group, although it also has an interest in developments on the international (re)insurance markets through retrocession arrangements with other Group companies. By adding blocks of foreign business E+S Rück is able to extend the geographical spread of its portfolio, hence improving its risk diversification and stabilising earnings.

E+S Rück is the second-largest non-life reinsurer in the German market. The rating agencies most relevant to the insurance industry have awarded Hannover Re as well as

E+S Rück very strong insurer financial strength ratings (Standard & Poor's AA- "Very Strong" and A.M. Best A "Excellent").

Disclaimer: Some of the statements in this press release may be forward-looking statements or statements of future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. Hannover Re and its affiliates does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such statements. Therefore, in no case whatsoever will E+S Rück and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages.


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Hannover Rück

Karl-Wiechert-Allee 50 Hannover Germany

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Source: Hannover Rück via Thomson Reuters ONE

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