Hannover Re, the world’s third- largest reinsurer, expects more than 5 billion euros ($6.4 billion) in losses from two storms to sustain prices for coverage in Germany.
“Heavy loss expenditures, especially in connection with the June storm Ela as well as belatedly reported claims from hailstorm Andreas in the previous year, should serve to at least keep rates stable,” Michael Pickel, management board member responsible for Germany, said at a press conference in Baden- Baden, Germany.
For other coverage like general and motor liability, “allowance will have to be made not only for the further decline in interest rates but also for the claims experience from prior years,” he said in comments echoing remarks by Munich Re earlier today.
Hannover Re in August reported a 10 percent rise in profit during the second quarter, helped by a lower level of large claims and higher earnings from life reinsurance. The Hanover, Germany-based company confirmed a full-year profit target of about 850 million euros.
Hailstorm Andreas, which hit Germany in July last year, has resulted in insured losses of 2.9 billion euros, making it the country’s costliest storm in the last 15 years, Hannover Re said. Insured losses from Ela are estimated at about 1.8 billion euros in Germany, Belgium and Luxembourg, according to Munich Re, the world’s biggest reinsurer.
Hannover Re “anticipates further market opportunities in 2015 and considers itself well on track to maintaining its market share on a high level,” it said.
Reinsurers help primary carriers such as Allianz SE and Talanx AG cover risks in return for a share of the premiums. They are meeting brokers and clients this week in the German spa town of Baden-Baden to renegotiate terms and conditions of contracts up for renewal in January. The talks focus more on the German market and follow the gathering in Monte Carlo in September.