News Reinsurance22 Feb 2021

Asia Pacific:Hannover Re sees 4.1% premium growth in the region at 1 Jan renewals

| 22 Feb 2021

One of the world's largest reinsurers, Hannover Re, increased its premium volume with growth of 4.1% in the Asia Pacific last year while at the same time boosting profitability, according to a statement issued by the reinsurer.

The markets presented a very mixed picture during the renewal negotiations, with appreciable improvements in conditions not achievable on a consistent basis.

In China, the focus was on profitable expansion of the already existing portfolio after years of very vigorous growth. In Southeast Asia the premium volume increased again by more than 20%. In Korea, too, significant growth in premium income was booked on the back of a sustained improvement in terms and conditions.

In the Americas reporting category, which encompasses North and Latin America, the premium volume surged by 15.3%. driven by expanded customer relationships and hardening market conditions.

The premium volume for the reporting category Europe, Middle East and Africa grew by 10.6%.

Globally, Hannover Re booked premium growth in traditional property and casualty reinsurance of 8.5% adjusted for exchange rate effects in the treaty renewals as at 1 January 2021. A price increase of 5.5% was achieved for the renewed business. Along with another substantial burden of large and frequency losses in various regions, this price trend was driven chiefly by lower interest rates and uncertainties surrounding the further course of the COVID-19 pandemic.

Mr Jean-Jacques Henchoz, CEO of Hannover Re, said, "All in all, we can look back on a thoroughly satisfactory round of treaty renewals. The pricing momentum of the past year held up in the 1 January renewals. The sustained trend reversal in prices continues."

He added, "We secured further improvements in prices and conditions to a varying extent across all lines and regions. Particularly in times of crisis, robustly capitalised reinsurers such as ourselves are highly sought-after."


"The positive trend coming out of the 1 January renewals should be sustained in the subsequent rounds of renewals," Mr Henchoz said. "The significant price increases that we are seeing in many lines on the primary insurance side will also gradually support rates in reinsurance business. We benefit from this directly through proportional covers."

Based on constant exchange rates, growth in Group gross premium in 2021 should be around 5% and the return on investment should reach around 2.4%.

31% fall in net income

The Group net income generated by Hannover Re reached EUR883m ($1.07bn) in the 2020 financial year based on preliminary key figures. This was 31% lower than the EUR1.28bn reported for 2019.

Gross premium increased by about 12% adjusted for exchange rate effects to EUR24.8bn. The return on investment booked from assets under own management amounted to 3.0% for 2020. The combined ratio deteriorated to 101.6% in 2020 (2019: 98.2%) and is thus higher than the full-year target of no more than 97%.

"Our extremely robust result in the 2020 pandemic year shows that we can deal well with such extreme situations thanks to our diversified business model, our risk management and our capital strength," Mr Henchoz said. "We are well placed to achieve our targets for the 2021 financial year."

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