Germany
The amended Insurance Contract Act entered into force in the German market on 1 January 2008. Key aims of this reform are to enhance the transparency of life and annuity insurance products, provide increased cash surrender values in the event of premature contract termination and facilitate timely participation of customers in life insurers' hidden reserves.
Implementation of the reform tied up considerable resources at providers, especially for the conversion of internal processes; the restructuring of sales processes was similarly reflected in a drag on new business that was particularly visible in the first half of 2008.
On the other hand, new business profited from government- assisted "Riester" annuity products, for which the fourth and last step increase came into force at the beginning of 2008. Many of our existing clients used this incentive step as an opportunity to substantially raise premiums and benefits.
E+S Rück, which serves the German market within the Hannover Re Group, saw its premium income in life and health reinsurance decline to EUR 381.9 million (EUR 428.6 million) in 2008. Key factors in this development were the further planned run-off of a large transaction from 2004 and the reduction of our involvement in financing new business acquisition costs on the German market. In the fourth quarter of 2008 a mid-sized block assumption transaction with a planned term of ten years was written with a life insurer in western Germany. The operating profit (EBIT) in 2008 was positive.
Insurance solutions for the so-called "60-plus generation" are a focus of our activities, particularly in the area of long-term care annuity insurance. We have amassed special expertise, which is attracting growing interest in what is still – in Germany – a relatively rare form of individual risk provision.