| Key figures for property and casualty reinsurance | |||||||
|---|---|---|---|---|---|---|---|
| in EUR million | 2016 | 2015 | |||||
| 1.1. – 31.3. |
1.4. – 30.6. | +/– previous year | 1.1. – 30.6. | +/– previous year |
1.4. – 30.6. | 1.1. – 30.6. |
|
| Gross written premium | 2,502.1 | 2,125.2 | -9.8% | 4,627.4 | -6.9% | 2,355.1 | 4,972.2 |
| Net premium earned | 1,961.3 | 1,877.1 | -6.7% | 3,838.4 | -1.4% | 2,011.9 | 3,894.2 |
| Underwriting result | 100.3 | 66.1 | -29.9% | 166.4 | -2.6% | 94.3 | 170.9 |
| Net investment income | 207.2 | 208.9 | -9.2% | 416.1 | -2.1% | 230.1 | 425.2 |
| Operating result (EBIT) | 299.7 | 261.3 | -20.5% | 560.9 | -3.9% | 328.5 | 583.7 |
| Group net income | 204.3 | 171.9 | -30.4% | 376.2 | -10.1% | 247.0 | 418.4 |
| Earnings per share in EUR | 1.69 | 1.43 | -30.4% | 3.12 | -10.1% | 2.05 | 3.47 |
| EBIT margin1 | 15.3% | 13.9% | 14.6% | 16.3% | 15.0% | ||
| Combined ratio2 | 94.7% | 96.1% | 95.4% | 95.0% | 95.4% | ||
| Retention | 87.9% | 88.5% | 88.2% | 90.3% | 89.6% | ||
| 1 Operating result (EBIT) / net premium earned 2 Including funds withheld |
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Property and casualty reinsurance continues to be fiercely competitive; the supply of reinsurance coverage still far exceeds demand. While a number of sizeable loss events were recorded on the regional level, they failed to bring about any fundamental hardening on the markets. It remains the case that the healthy capital resources enjoyed by ceding companies, which enable them to retain more risks for own account, as well as the additional capacities originating from the ILS market – especially in US natural catastrophe business – are both factors exerting sustained pressure on prices and conditions.
In the treaty renewals as at 1 April we nevertheless achieved a satisfactory outcome thanks to our broad diversification. It is on this date that business in Japan is traditionally renegotiated; in addition, more modest treaty renewals – in terms of volume – are conducted in the markets of Australia, New Zealand, Korea and North America. While the price decline in some markets and segments was appreciable, we were still able to safeguard good profitability for our portfolio on the basis of our selective underwriting and our focus on existing client relationships. Furthermore, in some areas we were again able to act on attractive business opportunities, as a consequence of which the premium volume for the portfolio renewed as at 1 April grew by 9%.
The gross written premium for our total portfolio declined by 6.9% as at 30 June 2016 to EUR 4.6 billion (EUR 5.0 billion). At constant exchange rates the decrease would have been 5.6%. The level of retained premium was lower than in the corresponding period of the previous year at 88.2% (89.6%). Net premium earned contracted slightly to EUR 3.8 billion (EUR 3.9 billion); on a currency-adjusted basis it was unchanged at EUR 3.9 billion.
The major loss experience was considerably more intensive than in the previous year's period. This was particularly true of the second quarter, in which losses were substantially higher than our quarterly budget of EUR 167 million. We benefited, however, from loss reserves constituted with the unused major loss budget for the first quarter. Net expenditure on large losses for the first six months came in at altogether EUR 352.7 million, compared to just EUR 197.4 million in the previous year. The most expensive single loss event was the devastating wildfires in the Canadian province of Alberta at EUR 131.6 million. The severe earthquake in Ecuador resulted in a charge of EUR 56.9 million for our account. A number of smaller natural catastrophe events and man-made losses were also incurred.
Owing to the increased loss expenditure, the underwriting result for total property and casualty reinsurance fell by 2.6% to EUR 166.4 million (EUR 170.9 million); it nevertheless remains on an acceptable level. The combined ratio of 95.4% (95.4%) is positive and in line with our goal of staying below the 96% mark.
The investment income booked for property and casualty reinsurance from assets under own management retreated by a modest 2.5% to EUR 404.5 million (EUR 415.0 million).
The operating profit (EBIT) booked by the Property & Casualty reinsurance business group as at 30 June 2016 contracted slightly by 3.9% to EUR 560.9 million (EUR 583.7 million). Standing at 14.6% (15.0%), the EBIT margin again surpassed our minimum target of 10%. Group net income decreased to EUR 376.2 million (EUR 418.4 million). Earnings per share amounted to EUR 3.12 (EUR 3.47).
