Life and health reinsurance

The general framework conditions in international life and health reinsurance can in principle be described as favourable. In mature insurance markets such as the United States, Japan, United Kingdom and Germany this assessment is coloured by the demographic trend, i.e. the ageing of the population, which is reflected in heightened demand – especially for annuity and health insurance products.

Increasing urbanisation in leading emerging markets such as China, India and Brazil is fostering a rapidly growing middle class, which to a greater extent than before is clamouring for insurance solutions designed to protect surviving dependants and afford individual retirement provision for policyholders.

With this in mind, primary insurers are looking for tailored reinsurance solutions that support their own capital, liquidity and risk management. In the coming years we expect the reinsurance market to develop a more vigorous growth momentum than the primary market. Furthermore, it is our expectation that earnings prospects will remain on a satisfactory level.

Life and health reinsurance is generally characterised by its stable growth and minimal exposure to random fluctuations in results. There are nevertheless financial and non-financial risks (particularly risks such as mortality and longevity, morbidity and disability as well as the lapse risk), which are fully integrated into Hannover Re’s risk management. In this context, crucial importance attaches to the appropriate selection of pricing assumptions, fundamental research into developments affecting the biometric actuarial bases, the adequate and complete reserving of all technical liabilities as well as risk diversification (both geographically and in terms of risk types, e.g. between mortality and longevity).