Life and health reinsurance
Even under the shadow of the international financial market crisis, we anticipate a favourable constellation in life and health insurance from the medium-term perspective; in most markets this will lead to further dynamic growth on account of long-range demographic changes.
Hannover Life Re's “Five Pillar” model demonstrated its resilience even during the volatile years of 2008/2009, and we shall therefore persevere systematically with this strategic approach. Areas of concentration for the year ahead will be the US mortality market (part of the “conventional reinsurance” pillar) as well as UK annuity and pension business (part of the “new markets and products” pillar). We shall also put a clear emphasis on the expansion of our portfolios in Greater China and Japan, a priority that will be reflected in the allocation of the necessary resources.
On the demand side we expect the strong international interest in financially oriented reinsurance solutions to be sustained because other models for strengthening the solvency base of primary insurers – such as direct capital increases or securitisations – have not yet attracted sufficient attention from shareholders or the financial markets.
The main drivers of our business development in the current year will continue to be the mature insurance markets of the United States, United Kingdom, Germany, Australia, South Africa and France. In all these markets we are recognised as a leading reinsurer – a role that we intend to build on systematically.
We consider the expansion of our infrastructure, which in recent years led to the establishment of new locations in Bermuda, Shanghai, Seoul, Mumbai and Rio de Janeiro, to be largely completed.
Following the acquisition of the ING life reinsurance portfolio and our entry into the traditional mortality market, the United States will be Hannover Life Re's most significant market for some years to come.
In the United Kingdom it is our assumption that business involving the biometric risk of longevity – both in the form of enhanced annuities with a reduced payment period and through the assumption of risks associated with existing pension funds – will prove to be a significant growth sector. From the standpoint of the pandemic catastrophe risk, this business takes on a risk-minimising role through biometric diversification effects.
For the German and Australian markets we anticipate moderate growth rates, while we are looking to comfortable double-digit percentage increases annually for major emerging markets such as Greater China – not only in the short but also the medium term.