BERLIN (Reuters) – German reinsurer Hannover Re is braced for falling premiums next year which could dampen business prospects, Welt am Sonntag reported, citing chief executive Ulrich Wallin.
By contrast, Hannover Re said almost two months ago that it expected premiums to grow in a low single-digit percentage range in 2014.
“Reinsurers want to do more business than what's requested by direct insurers,” Wallin said in an advance release of an interview published by the weekly newspaper on Saturday.
“But we will decline a price war,” the CEO was quoted as saying. “We will forego business in 2014 if premiums fall too strongly.”
Reinsurers have been hit by some big localised claims this year, such as hail storms and flooding in Germany, but have not faced the massive payouts for hurricanes or earthquakes they saw in recent years, creating leeway for improved dividends or share buybacks.
Reinsurers, which provide a financial backstop to insurance companies facing big claims in exchange for part of the premium, have also found it difficult to put their cash to work profitably because of low interest rates and increasing competition from pension and hedge funds.
Separately, Wallin said Hannover Re may top up its 19.9 percent stake in German life insurer Heidelberger Leben if majority owner Cinven, a London-based private equity firm, decides to sell off parts of its holding.
(Reporting by Andreas Cremer, editing by David Evans)
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.