Germany-based reinsurer Hannover Re expects to surpass its strategic growth target for its overall property and casualty (P&C) reinsurance business, driven in part by increased demand in structured reinsurance.
The reinsurer recently announced its first-quarter 2018 results, which revealed solid premium growth enabled by taking advantage of improved reinsurance market conditions and increased net income of €273.4 million.
Overall, the firm anticipates positive business prospects for 2018, and explains in its quarterly statement that based on unchanged exchange rates, it expects to surpass its strategic growth target of 3% – 5% for its total P&C reinsurance business.
“This will be driven in part by stronger demand in structured reinsurance. In light of the prevailing market conditions in property and casualty reinsurance, we anticipate a good underwriting result,” said the reinsurer.
Hannover Re continued to explain that surpassing its P&C reinsurance growth target, as well as achieving 2018 Group net income of more than €1 billion and a combined ratio of below 96%, is dependent on large loss expenditure remaining within its envisaged budget, of €825 million.
The reinsurer noted “successful treaty renewals” in P&C reinsurance at January 1st, as well as being “similarly satisfied” with the outcome of the April renewals.
Commenting on renewal specifics, the reinsurer explained that during the April renewals previous losses in Japan led to improved conditions for liability treaties, although its premium did decline here as a result of the renewal of a large-volume treaty with a smaller written share.
The Korean market remained competitive and as a result Hannover Re reduced its shares here, while fierce competition in the Indian marketplace led to reduced exposures in some areas, although this was offset by the acquisition of some additional business relationships.
Within its North American business, the renewal “passed off highly satisfactory” with rate increases under loss-impacted property programmes and stable business conditions, while competition in casualty business resulted in the firm pulling back its exposure.