Hannover Re’s E+S Rück expects improved prices and conditions for 2020 on the German market
Positive premium development is expected on the German market in the year ahead, according to E+S Rückversicherung the Hannover Re subsidiary responsible for the group’s German business.
This assessment is supported by business opportunities in areas such as telematics and legal protection and improved conditions on the primary insurance side, which are particularly beneficial for proportional reinsurance.
“Bearing in mind the already strained state of technical profitability and the further decline in interest rates, higher reinsurance prices are essential in many segments,” Michael Pickel, chief executive officer of E+S Rück, noted.
“Along with loss-impacted natural catastrophe covers, we see a particularly pressing need for further adjustments in the motor and industrial fire insurance lines.”
E+S Rück anticipates developments in motor insurance, with stable average premiums and conditions for the most part under proportional treaties.
The company said that rising risk awareness among reinsurers will likely lead to slight rate increases in the German market for natural catastrophe risks, with growing demand and price adjustments under loss-affected programmes.
On the claims side, too, it said modest improvements can be discerned; this is especially evident in homeowners’ comprehensive insurance, where natural catastrophe losses are within expectations.
In industrial fire insurance, which has been mostly loss-making in the past, the efforts made by primary insurers to restore business to profitability are starting to have an effect, the company noted. In the reinsurance market, too, E+S Rück consequently expects to see improved conditions overall with continuing strain on the claims side.
In the area of legal protection insurance, E+S Rück said that a significant trend towards stronger demand for reinsurance covers can be discerned for the first time, opening up further business opportunities. This is being driven in particular by accumulation losses such as those that can result from the diesel emissions scandal, or from incorrect advice given by financial services providers.
