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Non-life reinsurance

Key figures for non-life reinsurance
in EUR million 2013 2012
  1.1. - 31.3. +/-
1.1. - 31.3.
1 Including expenses on funds withheld and contract deposits
Gross written premium 2,197.6 +3.8% 2,116.6
Net premium earned 1,691.9 +8.8% 1,554.7
Underwriting result 98.1 +109.8% 46.8
Net investment income 186.8 -26.6% 254.5
Operating result (EBIT) 258.7 -1.7% 263.0
Group net income 174.9 +1.0% 173.2
Earnings per share in EUR 1.45 +1.0% 1.44
Combined ratio1 94.0%   96.8%
Retention 89.8%   91.2%

Our largest business group, non-life reinsurance, fared well in the first quarter. The outcome of the treaty renewals as at 1 January 2013 – the time of the year when the vast majority of our treaties in traditional reinsurance are renegotiated – was satisfactory. Although the climate was more competitive this year, we achieved a premium level comparable with that of the previous year. Hurricane Sandy, which caused sizeable losses for the (re)insurance industry in 2012, had a stabilising effect on prices in non-life reinsurance. Rate increases were attainable in areas where programmes had been affected by losses. They were particularly marked in marine business. In view of the historically high major loss expenditure caused by the wreck of the “Costa Concordia” cruise ship and Hurricane Sandy, rates climbed by between 25% and 40% under loss-impacted treaties. Even under programmes that had been spared losses premium increases averaging 10% were obtained. Motor business in the United Kingdom similarly saw appreciable price rises for non-proportional reinsurance covers, prompting us to step up our involvement here too. The development of our portfolio in the United States was also highly gratifying: we posted growth of some 14% here. Premium income in global catastrophe business increased by 11%. The pressure on prices eased significantly in this segment, in part due to the losses caused by Hurricane Sandy.

Along with the increased competition, a trend could be observed in this year’s round of renewals towards large primary insurance groups carrying more risks in their retention. This is one of the reasons why the growth in renewed non-life reinsurance business came in at a moderate 1%, contrasting with 6% in the previous year. In higher-margin non-proportional business, however, sizeable growth of around 6% was generated. Proportional business contracted slightly.

The gross premium for our non-life reinsurance business group increased by 3.8% relative to the corresponding period of the previous year to reach EUR 2.2 billion (EUR 2.1 billion). At constant exchange rates, especially against the US dollar, growth would have been 4.0%. The level of retained premium retreated slightly to 89.8% (91.2%). Net premium earned climbed 8.8% to EUR 1.7 billion (EUR 1.6 billion), or 8.9% adjusted for exchange rate effects.

The major loss situation in the first quarter of 2013 was exceptionally calm. We only incurred a satellite loss at a cost of EUR 13.4 million for net account. This contrasted with expenditure of EUR 60.6 million in the comparable quarter. Against this backdrop, the underwriting result for total non-life reinsurance closed at a very pleasing EUR 98.1 million (EUR 46.8 million). The combined ratio improved to a very good 94.0% (96.8%), hence beating the 96% mark targeted for the full year.

The operating profit (EBIT) in non-life reinsurance closed at EUR 258.7 million (EUR 263.0 million) as at 31 March 2013. Group net income was on a par with the very good level of the corresponding quarter at EUR 174.9 million (EUR 173.2 million). Earnings per share came in at EUR 1.45 (EUR 1.44).


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