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Life & Health reinsurance
As an internationally operating reinsurer, we are active in all areas of life and health reinsurance. For the most part we assume far more than the pure underwriting risk for our customers. We are closely involved in the process at an early stage in order to work together on jointly identifying their exact reinsurance needs.
| Life & Health reinsurance: Forecast development for 2017 | ||
| Volume1 | Profitability2 | |
|---|---|---|
| Financial Solutions |  | ++ |
| Risk Solutions | ||
| Longevity | | +/- |
| Mortality | | +/- |
| Morbidity | | +/- |
| 1 In EUR 2 + + = significantly above the cost of capital + = above the cost of capital + / – = on a par with the cost of capital – = below the cost of capital | ||
In Germany the implications of the launch of the new long-term care insurance system for LTC products are awaited with keen anticipation. Starting 1 January 2017, instead of the familiar three care levels there are now five grades of care that facilitate a more detailed assessment of the need for assistance. In the year under review we explored this innovation at length and made preparations to support our customers with (re)insurance solutions tailored to the new long-term care insurance scheme. In addition, the requirements of Solvency II and the establishment of the supplementary reserves needed for life products promising guaranteed returns in excess of an official reference rate (Zinszusatzreserve) will pose further major challenges for German life insurers in the coming year. In the rest of Europe, too, we anticipate rising demand for reinsurance solutions that deliver capital relief and / or solvency optimisation. In the financial year just ended we developed concepts for this purpose in order to implement customised solutions for customers. In the United Kingdom it is our expectation that the market will again prove to be extremely competitive in the year ahead and that the price level will remain under strain owing to considerable international competition. The US financial solutions market is known for its marked innovation potential. As a market leader, we expect to build on the good development to date in the coming financial year. We are confident of our ability to cover the continued growth in demand among US life insurers for reinsurance solutions designed to provide capital and reserve relief.
In the Asian life (re)insurance market we are very optimistic that we can build on the success of the year just ended. Particularly in health reinsurance business, we are a sought-after and capable partner for customers who benefit from our international experience.
Demand in longevity business is expected to remain brisk around the world in 2017. Life expectancy will continue to rise, while at the same time regulatory authorities are imposing more rigorous reporting and capital management requirements. This creates a challenge for the insurance industry. Given that we are equipped with more than 20 years of knowhow in this market segment, we are well placed to play a central role in the global development of the longevity (re)insurance market going forward.
The challenges that lie ahead in life and health reinsurance remain diverse in nature and their effects on the market will be complex. Along with the anticipated business-specific developments in the various markets described above, we expect demand for automated, paperless underwriting processes to grow even more vigorously than in 2016. In view of the positive feedback received to date and already existing firm inquiries, we are confident of implementing our automated underwriting system with numerous additional customers in the coming year.
Furthermore, the dynamic advances being made in technology and digitisation, in particular, will in future enable, for example, the transfer of insurance data in real time to the (re) insurer. In this way it will be possible to calculate premiums and risk loadings on a person-specific level and hence make life insurance part of active living. We shall press ahead with our intensive exploration of these developments in order to help shape future innovations that combine lifestyle and wellness with life insurance.