Structured products
We are thoroughly satisfied with the development of structured reinsurance products. Implementation of the insurance supervision act regulating structured reinsurance products in Germany as well as an ordinance issued by the Federal Ministry of Finance brought about greater legal certainty regarding the handling of financial reinsurance contracts and hence generated new business potential.
The surge in demand was also driven by capital depletion at primary insurers – induced by the financial market crisis. This was especially true of surplus relief contracts. The requirements placed on insurers as a consequence of IFRS (International Financial Reporting Standards) Phase II and Solvency II generated further growth in Europe. What is more, increased demand could be felt around the world for loss portfolio transfers and multi-year excess of loss arrangements to provide combined protection for retentions. The latter reduces the volatility of results and thus also optimises equity requirements according to Solvency II.
With the capital market environment improving over the course of the financial year, demand for surplus relief contracts normalised in the United States. It nevertheless continued to grow at smaller companies, including for example mutual insurers.
In keeping with our strategy of regional diversification, we further enlarged our portfolio in Europe. Yet we were also able to raise our profile and write new business in Asia and Australia.
We are one of the two largest providers of structured covers in the world and can draw upon many years of experience as regards actuarial, balance sheet, accounting and underwriting expertise. Our range of products is geared to optimising our clients' cost of capital.
In the year under review we further intensified the cooperation with our regional departments writing traditional reinsurance, thereby enabling us to offer our clients the full spectrum of our company's products and services.
We succeeded in enlarging our premium volume in the year under review.