North America

The North American (re)insurance market is the world's largest single market and currently the second-most important for Hannover Re's portfolio. It accounted for 14.8% of our premium volume in non-life reinsurance.

In the second half of the year the economic climate in the United States recovered somewhat from the adverse effects of the financial and economic crisis. Consumption also picked up slowly, aided by continued low interest rates. With write-downs returning to normal levels and investment income bouncing back, the equity position of primary insurers improved surprisingly sharply relative to 2008. According to an analysis carried out by an institute specialising in insurance stocks, the financial situation of insurers in the United States has returned to the previous year's level after a vigorous recovery in the second quarter. For this reason, demand for reinsurance grew only insignificantly in the US. The trend towards carrying increased retentions was not, however, sustained in the year under review.

We welcome the efforts being made in the US to optimise oversight of the insurance industry and put in place a point of contact on the federal level for foreign agencies and associations. In view of the global financial crisis and constantly growing international integration, this is of special importance – not only for cooperation with the International Association of Insurance Supervisors (IAIS), but also for negotiations over unilateral or mutual recognition of regulatory bodies. Similarly, we view the efforts of the National Association of Insurance Commissioners (NAIC) as well as of individual US states to improve conditions for foreign reinsurers as a very sensible move.

Based on its long-standing business relationships, its expertise and especially its excellent financial standing, Hannover Re is a valued partner in North America. Given the cyclical nature of the North American market, it is important to play an active role even in softer phases so as to safeguard the possibility of renewed business expansion in coming “hard” market years. Market surveys confirm that we continue to be qualitatively very well positioned in the broker market.

With a view to further diversifying our portfolio we again scaled back the share of larger cedants in the year under review, while at the same time expanding our business relationships with mid-sized regional players and mutual insurers. This business segment has been progressively enlarged over the past five years. Our concentration on these clients will continue to be the focus of our activities, with greater weight attached to strategically oriented customer relationships.

We quite deliberately did not seek to extend our market share in 2009, since we still do not consider business to be sufficiently attractive in certain segments. We nevertheless continue to form part of the small group of reinsurers that are preferentially approached for placement and pricing on account of their rateing and market standing.

In property business it was still possible to obtain appreciable rate increases in the first half-year, although the extent of the gains flattened off as the year under review progressed. The absence of catastrophe losses put an end to any further price rises.

Rates in casualty business are, in our assessment, broadly inadequate. Although price increases were possible in workers' compensation reinsurance, they were not sufficient; in the general liability lines and in professional indemnity business rates merely held stable. We therefore put any portfolio expansion on ice; the premium volume in general liability was largely maintained on a constant level. Having drastically scaled back our acceptances in the professional indemnity segment in recent years, we did not make any further reductions in the year under review. On the contrary, we made the most of opportunities to reshuffle our portfolio that emerged as a result of the effects of the financial market crisis.

No catastrophe loss events with a bearing on our company occurred in the United States. We were, however, affected by a hailstorm in the Canadian province of Alberta, which produced a net strain in the order of EUR 5 million for our account. The combined ratio stood at 106.4%.