Marine

Hannover Re ranks among the market leaders in international marine reinsurance business.

The recession triggered by the financial market crisis had significant repercussions on global trade: fewer goods were shipped at lower prices, causing the premium volume in cargo insurance to contract. Since the values of vessels have fallen, premiums in hull insurance also declined. Taken together with lower commodity prices, however, this trend had positive effects with regard to claims inflation.

On the reinsurance side demand was stable: thanks to risk-adequate conditions the market was in a good state, and we were able to obtain higher prices. Prices surged especially vigorously in offshore business owing to the heavy burden of losses in the previous year. Our underwriting policy focuses first and foremost on more profitable non-proportional business. In the Gulf of Mexico we consolidated our exposures and further reduced our limits of liability. In this line we were seeking to accelerate the enlargement of our portfolio outside the United States and Western Europe – efforts which proved successful.

The contraction in marine volume prompted by the economic crisis led to sizeable losses of premium in Germany – not only in cargo and carrier's liability insurance but also in hull insurance. A further factor was the rise in insurance expenditures, which ultimately caused profitability to deteriorate after the more relaxed climate of previous years.

As far as major claims were concerned, 2009 was a relatively untroubled year worldwide. The largest single event was the total loss of a drilling rig off the coast of Australia with a net strain of EUR 16.9 million.

All in all, we are satisfied with the development of our marine business. The combined ratio stood at 78.1%.