|
EQS-News: Hannover Rück SE
/ Key word(s): Miscellaneous
Corporate news E+S Rück considers further price increases unavoidable due to high inflation and major loss burden
Hannover, 24 October 2022: E+S Rückversicherung AG, the Hannover Re subsidiary responsible for the Group's German business, expects significant improvements in risk-adjusted prices and conditions in property and casualty reinsurance on the back of continued heavy claims expenditure and soaring inflation. "Both insurers and reinsurers alike find themselves facing a sharp rise in inflation, which together with sustained high expenditures for major claims is adversely impacting the profitability of the entire industry," Dr. Michael Pickel, Chief Executive Officer of E+S Rück, said. "While the images of last year's devastating flooding still remain very much in all our minds, the winter storms, droughts and wildfires experienced this year show that Europe is seeing an increased prevalence of natural disasters. All this makes further price rises in both original and reinsurance business indispensable." Winter storms such as "Ylenia" and "Zeynep" as well as other severe weather events ensured that in Germany alone the insured losses in the first half of 2022 again surpassed the multi-year average. In other parts of Europe, too, insurers had to deal with substantial losses, including for example those incurred from June hailstorms in France. All in all, against the backdrop of continued heavy claim expenditures, E+S Rück anticipates significant adjustments to prices and conditions in the property line – extending beyond pure catastrophe covers. Moreover, demand for high-quality reinsurance protection such as that offered by E+S Rück remains strong. In motor insurance the claims frequency continued to normalise and reverted back towards the multi-year trend, albeit on a lower level than before the pandemic. At the same time, inflation and supply chain disruptions are sharply exacerbating the trend towards ever-higher costs for spare parts and repairs. Results in the motor line are therefore likely to take another appreciable turn for the worse if primary insurers fail to respond with correspondingly sizeable price increases. Natural catastrophe covers have once again incurred considerable losses from severe weather events in the current year. The German Insurance Association GDV estimates that winter storms "Ylenia", "Zeynep" and "Antonia", which swept across large parts of Germany as well as northwest and central Europe at the start of the year, caused a market loss of around EUR 1.4 billion, making it one of the three most severe winter storm events since 2002. High inflation rates are further adding to claims costs, while increased demand for natural perils covers in the aftermath of the previous year's severe flooding has led to higher exposures on the primary insurance side. At the same time, capacities in the reinsurance market have contracted overall. On the whole, prices for catastrophe covers should therefore rise significantly. In industrial and commercial business the pressure for remediation remains undiminished. At the same time, supply chain bottlenecks and gloomier economic prospects on account of high inflation are weighing on companies. In the business interruption line, longer repair and recovery times will likely be reflected accordingly in adjustments to the scope of coverage and conditions. When it comes to cyber covers, progressive digitalisation and sustained growth combined with increasing losses from cyber-attacks are generating greater risk awareness. Insurers have reduced their limits accordingly, negatively impacting the available capacity. All this is resulting in further significant improvements in prices and conditions for insurers and reinsurers alike. "While further adjustments to pricing and conditions are unavoidable both in original business and on the reinsurance side, at E+S Rück we remain committed to partnership-based negotiations with all market players and to long-term customer relationships," Dr. Michael Pickel said. "We can only meet the current and future challenges together. I am optimistic that we will be able to do this in the upcoming renewals."
Hannover Re, with gross premium of more than EUR 27 billion, is the third-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with more than 3,000 staff. Established in 1966, the Hannover Re Group today has a network of more than 170 subsidiaries, branches and representative offices worldwide. The Group's German business is written by the subsidiary E+S Rück. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior". Please note the disclaimer:
24.10.2022 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. |
| Language: | English |
| Company: | Hannover Rück SE |
| Karl-Wiechert-Allee 50 | |
| 30625 Hannover | |
| Germany | |
| Phone: | +49-(0)511-5604-1500 |
| Fax: | +49-(0)511-5604-1648 |
| Internet: | -re.com |
| ISIN: | DE0008402215 |
| WKN: | 840 221 |
| Indices: | DAX |
| Listed: | Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange |
| EQS News ID: | 1468611 |
| End of News | EQS News Service |
|
|
1468611 24.10.2022 CET/CEST
