Key figures for property and casualty reinsurance
in EUR million 2015 2014
1.1. – 31.3. +/– previous year 1.1. – 31.3.
Gross written premium 2,617.1 +24.2% 2,107.8
Net premium earned 1,882.3 +15.4% 1,631.7
Underwriting result 76.6 -12.5% 87.6
Net investment income 195.1 -4.8% 204.8
Operating result (EBIT) 255.2 -9.0% 280.5
Group net income 171.4 -13.4% 197.9
Earnings per share in EUR 1.42 -13.4% 1.64
EBIT margin1 13.6% 17.2%
Combined ratio2 95.7% 94.4%
Retention 88.9%   91.2%

The prevailing intense competition in property and casualty reinsurance shows no signs of easing. Given the absence of market-changing major losses, our ceding companies are well capitalised and consequently passing on fewer risks overall to the reinsurance market. Furthermore, the inflow of capital from the ILS market led to appreciable price erosion, especially in US natural catastrophe business.

These factors were also crucial in shaping the treaty renewals as at 1 January 2015. It was on this main renewal date for reinsurance treaties that around 65% of our portfolio was renegotiated. Bearing in mind the challenging environment, we are broadly satisfied with the outcome for our company, despite the fact that the rate quality of the renewed portfolio was lower than in the previous year.

Although the price decline in many markets was significant compared to the previous year, we achieved a thoroughly positive outcome thanks to our good rating and long-standing customer relationships. We were especially satisfied with the price trend for our German and US business. The rate level in the United States was commensurate with the risks, hence enabling us to enlarge our premium volume through systematic new business acquisitions. In Germany we were able to obtain further price increases for non-proportional motor own damage covers on account of losses from windstorm and hail events in prior years. The total portfolio in our domestic German market closed with a modest premium gain due to new client accounts.

The development of rates in the aviation line was less favourable. The significant major losses incurred in 2014 failed to produce the price increases that had been expected here. Given the unchanged generous availability of insurance capacity, rates showed only limited movement and we therefore scaled back our premium volume.

Despite adhering to our systematic, profit-oriented underwriting policy, we booked a higher premium volume for our total renewed portfolio of property and casualty reinsurance. Particularly notable increases were recorded in emerging markets, the United States and in the area of agricultural risks.

Driven in part also by the strong US dollar, the gross premium for our Property & Casualty reinsurance business group surged by a vigorous 24.2% to EUR 2.6 billion (EUR 2.1 billion). This additionally includes a non-recurring special effect of EUR 93,4 million in facultative reinsurance business resulting from improved estimation methods for more timely booking of premiums. At constant exchange rates an increase of altogether 13.0% would have been recorded. The level of retained premium contracted year-on-year to 88.9% (91.2%). Net premium earned climbed by 15.4% to EUR 1.9 billion (EUR 1.6 billion); adjusted for exchange rate effects, growth would have amounted to 4.9%.

As had already been the case in the previous year, expenditure on major losses came in under the envisaged budget, but at EUR 62.0 million it was higher than the figure for the comparable period of the previous year (EUR 30.6 million). Along with storm “Niklas” and a winter storm in the United States, the crash of a German passenger jet in the French Alps marked another tragic event for the civil aviation industry. The underwriting result for total property and casualty reinsurance still closed on a high level at EUR 76.6 million (EUR 87.6 million). The combined ratio of 95.7% was in line with our goal of achieving a combined ratio below 96% for the full year.

The investment income for property and casualty reinsurance contracted by 4.8% to EUR 195.1 million (EUR 204.8 million); the higher net realised gains recorded in the corresponding quarter of the previous year were the key factor here.

The operating profit (EBIT) in property and casualty reinsurance decreased to EUR 255.2 million (EUR 280.5 million) as at 31 March 2015. The EBIT margin of 13.6% (17.2%) exceeded the minimum target of 10%. Group net income fell short of the very good result booked in the comparable period of the previous year, retreating from EUR 197.9 million to EUR 171.4 million. Earnings per share stood at EUR 1.42 (EUR 1.64).



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