Target markets

We are optimistic about the business development in our target market of Germany: the treaty renewals passed off more favourably than expected. Thanks to improved conditions – sometimes markedly so – our subsidiary E+S Rück generated a highly satisfactory result in its domestic market. We expanded our customer base by establishing new business relationships, thereby extending our leading position in the lucrative German market.

In motor business we obtained rate increases following a higher claims frequency in this line in the third quarter of the year under review. It is gratifying to note that we were able to slightly reduce commissions under quota share cessions in proportional business. The increase in motor liability tariffs announced by insurers also offers potential leverage for boosting profitability in 2010. Remuneration for motor excess of loss programmes was further improved, hence building on the trend seen in the previous year.

The treaty renewals in North America were satisfactory overall and unspectacular; there was relatively little movement in the market. We expect that our portfolio will at least stay on a stable level. An increase in premium income in the original currency is certainly still attainable; the outcome of further renewal phases remains to be seen, since these dates are of greater significance in US business than in other markets.

Price movements in original business in the property lines were less attractive, prompting us to limit our proportional acceptances. Rates in non-proportional business, on the other hand, were stable. During the renewals we were able to gain market shares in the segment comprised of mid-sized enterprises.

The casualty lines did not see any further increases in retentions on the primary insurance side. Capacities are limited – especially for directors' and officers' (D&O) covers – and, what is more, expensive. Hannover Re maintained its portfolio on a constant level here, as was also true of errors and omissions (E&O) insurance. Our casualty portfolio should hold stable in the current year. We expect to see modest premium growth in total business.