Target markets

Having cemented our position as one of the leading reinsurers in our target market of Germany in 2010, we are looking ahead optimistically to the current financial year. With premium volume stable overall, prices for loss-impacted programmes rose while rates declined under programmes that had been spared losses.

In motor business the primary insurance market bottomed out in 2010, as a consequence of which premium volume can be expected to grow by around 3% in motor liability and roughly 5% in motor own damage in the current financial year. This development, combined with improved conditions, will have favourable implications for our result in proportional motor business and also – indirectly – for our non-proportional motor liability portfolio. In the treaty renewals as at 1 January 2011we generated rate increases averaging 5% in this line. In industrial fire business, where the resurgence of business activity led to an increase in loss events, we reduced our volume.

Lively competition is once again shaping business conditions in North America in the current financial year.

On the reinsurance side we expect rates for property business to remain adequate in 2011. Property catastrophe business saw sharp rate cuts in the treaty renewals as at 1 January 2011, and we therefore scaled back our business in areas where the price situation failed to adequately reflect the risks. The picture in casualty business was a mixed one: rates in standard casualty insurance, an important line for our company, remained stable; prices in the professional indemnity lines held stable or fell slightly.

In terms of premium volume, we expect to see a modest increase (+1%) for the current financial year. Growth will be driven by Canadian business. Given our very good market position and the excellent relations that we enjoy with our clients, we continue to see good business prospects going forward in our target market of North America.