Marine

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

The recession triggered by the financial market crisis continued to affect global trade in 2010. Although the premium volume in cargo insurance reflected the economic recovery, this has merely taken the form of stabilisation to date. Cargo volumes and premiums are still well below the level prior to the financial and economic crisis. Improvements were also evident in freight charges and the values of vessels, with a flattening trend and even increases in some areas.

Demand on the reinsurance side was largely stable, although softening tendencies were noticeable at the beginning of the year. This prompted us to consolidate our existing business and write new business only where it served to further enhance the diversification of our portfolio. Emerging markets may be mentioned here by way of example.

Our underwriting policy focuses first and foremost on more profitable non-proportional business. The primary objective for 2010 was to defend the price level of the previous year – which could be assessed as good owing to the repercussions of Hurricane “Ike” in 2008. In the year under review, as in 2009, we further reduced our limits of liability in the Gulf of Mexico and had thus already scaled back our exposure prior to the loss of the “Deepwater Horizon” drilling rig.

Along with a number of basic losses in hull insurance as well as cargo claims resulting from the earthquake in Chile, 2010 was dominated by the explosion on the “Deepwater Horizon” drilling rig; in addition to the direct loss of the oil platform this caused very extensive environmental damage. Given the uncertainties still surrounding possible liability claims and the complexity of this loss event, it will be years before it is settled.

The combined ratio stood at just 89.5% (78.1%) despite the aforementioned loss expenditure.