Hannover Re Profit Up In 2002

Hannover Re said it saw broad rate increases during treaty renewals in January. But the company said it detected early signs of softening, particularly in aviation.

In property-casualty reinsurance, the 2002 market saw significant rate increases as well as improvements in terms and conditions, Hannover Re said.

Wilhelm Zeller, Hannover Re chairman, discussing the company's tactics, said Hannover Re's strategy in cyclical business groups is to expand its market share only during hard market phases.

Hannover Re, Mr. Zeller explained, was therefore quick to exploit favorable market conditions, systematically expanding its market share with a strict profit orientation.

Gross written premiums in p-c reinsurance increased by 21.9 percent to 6 billion euros ($6.47 billion), and net premiums earned were up 17.2 percent, to 3.5 billion euros ($3.78 billion).

Hannover Re's underwriting result, with a profit of 130.8 million euros ($141.1 million) and a combined ratio of 96.3 percent, returned to the black for the first time since 1995.

The company's underwriting profit is a turnaround from the previous year, when it had booked an underwriting loss of 481.3 million euros ($519.3 million) due to the losses associated with the World Trade Center terror attacks.

Hannover Re posted a net investment income on a par with the previous year, at 928.4 million euros ($1.001 billion).

Mr. Zeller also said his company will resume its accustomed dividend policy, which was omitted in the previous year because of its terrorist attack-related losses.

In p-c reinsurance, the markets will continue to offer very good profit opportunities in 2003, he said. "It was possible to obtain broad-based rate increases and improvements in terms and conditions," Mr. Zeller said. "In certain segments, however, early signs of softening can already be detected, e.g. in aviation. Hannover Re has already slightly reduced its involvement in such lines."

Hannover Re is the world's fifth-largest reinsurance company.