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Development of the individual lines of business
The following section describes the development of the various lines of business. We would like to point out that with effect from the beginning of the 2014 financial year the exchange of business under joint underwriting arrangements between Hannover Rück SE and E+S Rückversicherung AG was reorganised. In property and casualty reinsurance, however, a retrocession from Hannover Rück SE to E+S Rückversicherung AG has been maintained. The proportion of Hannover Rück SE’s gross written premium attributable to business accepted from E+S Rückversicherung AG stood at 0.2% (0.2%) in the year under review and relates to the run-off of the 2013 and prior underwriting years.
Fire
Total gross premium income for the fire line climbed by 2.2% in the 2016 financial year to EUR 1,625.5 million (EUR 1,590.3 million). The net loss ratio rose in the year under review from 53.9% to 67.7%. The underwriting profit contracted to EUR 57.5 million (EUR 149.4 million). An amount of EUR 211.6 million (EUR 83.6 million) was withdrawn from the equalisation reserve and similar provisions in the year under review.
Casualty
Gross premium in casualty business climbed by 3.1% to EUR 1,443.7 million (EUR 1,400.9 million). The loss ratio decreased from 82.6% to 78.0%. The underwriting result improved to -EUR 17.4 million (-EUR 69.5 million). An amount of EUR 190.3 million was allocated to the equalisation reserve and similar provisions in the year under review; the allocation in the previous year had totalled EUR 139.6 million.
Accident
Gross premium increased for the accident line by a modest 1.2% to EUR 333.8 million (EUR 329.8 million). The loss ratio decreased from 70.3% to 64.8%. The underwriting result came in at EUR 22.0 million, after EUR 9.9 million in the previous year. An amount of EUR 20.6 million (EUR 23.7 million) was withdrawn from the equalisation reserve and similar provisions.
Motor
Gross premium income for the motor line contracted by 35.9% to EUR 913.1 million (EUR 1,423.6 million). The loss ratio also decreased to 68.1% (85.5%). The underwriting result closed at EUR 53.2 million after -EUR 159.4 million in the previous year. An amount of EUR 106.5 million was allocated to the equalisation reserve and similar provisions in the year under review, after a withdrawal of EUR 13.1 million in the previous year.
Aviation
The gross premium volume fell by 21.9% from EUR 349.7 million to EUR 273.0. The loss ratio decreased again, improving from 77.8% to 57.7% in the year under review. The underwriting result came in at EUR 39.3 million (EUR 2.5 million). An amount of EUR 23.3 million (EUR 15.5 million) was allocated to the equalisation reserve and similar provisions in the year under review.
Marine
Gross written premium for the marine line contracted by 13.3% to EUR 378.7 million (EUR 436.9 million). The net loss ratio decreased markedly from 74.3% to 30.8%. Against this backdrop the underwriting result increased very substantially from EUR 8.2 million to EUR 105.7 million. Releases of loss reserves from prior years that were no longer required were a particularly key factor here. An amount of EUR 86.7 million was withdrawn from the equalisation reserve and similar provisions in the year under review, after an allocation of EUR 48.2 million in the previous year.
Life
Gross premium income in the life line fell by 31.5% in the financial year just ended to EUR 4,107.8 million (EUR 5,998.7 million). This contraction had been anticipated in view of the above-average premium growth booked in 2015. Developments in the international markets were highly dynamic in many instances, opening up both new business opportunities and challenges. The protracted low level of interest rates, for example, continued to impact the development of business around the world, most notably causing the appeal of traditional (re) insurance products with savings components to further diminish. Regulatory changes such as the newly implemented Solvency II regime in Europe also ranked among the international challenges. It was particularly noticeable that primary insurers are increasingly seeking relief from the strain associated with capital-intensive longevity business.
The underwriting result in life business closed at EUR 97.0 million (EUR 163.3 million) in the year under review.
Other lines
The lines of health, credit and surety, other indemnity insurance and other property insurance are reported together under other lines. Other property insurance consists of the extended coverage, comprehensive householder’s (contents), comprehensive householder’s (buildings), burglary and robbery, water damage, plate glass, engineering, loss of profits, hail, livestock and windstorm lines. Other indemnity insurance encompasses legal protection, fidelity as well as other pure financial losses and property damage.
The total gross premium volume in the other lines climbed by 8.9% to EUR 2,841.6 million (EUR 2,609.4 million). The net loss ratio rose in the year under review from 68.4% to 72.5%. The underwriting result closed at -EUR 20.5 million, after EUR 54.0 million in the previous year. An amount of EUR 9.8 million was withdrawn from the equalisation reserve and similar provisions, following an allocation of EUR 53.4 million in the previous year.