In the Life & Health reinsurance business group we are a globally operating and professional partner for our customers. We conduct profitable activities in international and highly competitive markets and, as a global reinsurer, we strive for sustainable success. In so doing, we do not restrict ourselves solely to our core business of offering our customers reinsurance solutions, but rather we also tackle the manifold other challenges posed by the life and health reinsurance market.

Life & Health reinsurance: Forecast development for 2016
Volume1Profitability2
Financial Solutions++
Risk Solutions
Longevity+/-
Mortality+
Morbidity+/-

Developments on capital markets play a crucial role and will once again influence our business in the current year. The prevailing low interest rate environment will impact new business and the profitability of the existing portfolio in 2016, as it did in 2015. Especially in Europe, this situation is exerting a particularly dampening effect on demand for traditional savings products with interest rate guarantees. It is our expectation that attention in these markets will increasingly focus on risk-oriented and unit-linked solutions. There are also signs of further consolidation, principally affecting traditional life insurance business. It is evident that primary insurers are switching their new business with conventional life insurance products to innovative new concepts with a variable return. With a view to staying focused on writing new business, in-force portfolios are being passed on in block transactions to professional consolidation platforms. With the implementation of Solvency II effective 1 January 2016, we anticipate rising demand – especially in Germany – for innovative business possibilities and, in particular, for financially oriented reinsurance solutions that help to provide solvency relief for our primary insurance customers.

In South Africa and China, too, local insurance companies are facing fresh challenges with the implementation of new solvency regimes – namely SAM and C-ROSS respectively. As was already the case with the preparations for adoption of Solvency II, here too Hannover Re is optimally positioned to support our customers as an expert, reliable and solution-driven partner.

When it comes to longevity business, it is our expectation that the steady rise in worldwide demand will be sustained in the coming year and further profitable business opportunities will open up. Particularly in the Scandinavian markets and in the Netherlands, business potential can already be discerned.

In mature insurance markets we also see considerable upside in the years ahead for long-term care insurance products on account of the ageing population. Critical illness covers continue to be in demand on Asian markets. Thanks to our long-standing, international expertise Hannover Re is superbly positioned here to meet the needs of our customers going forward, as we have in the past. Changes affecting certain high-premium treaties can sometimes significantly reduce premium volume.

Right across markets stronger demand can be felt for health insurance products. We operate selectively in this segment and offer our customers bespoke solutions.

The continuing popularity of innovative, integrated, health-oriented insurance concepts is another worldwide trend. Society is placing greater emphasis on a health-conscious lifestyle and insurers are increasingly tackling these needs by extending their product ranges. Wearable devices, for example, enable users to track their fitness progress on a personalised basis. With the insured’s consent, such data can assist with the assessment of an individual’s state of health. The integration of the output of such mobile data sources into existing underwriting systems is a trend that will be sustained in the year ahead. We shall assist and systematically support our customers in this process with the aid of innovative concepts.

 

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