Outlook for treaty renewals as at 1.1.2011: Hannover Re subsidiary anticipates stable prices in Germany

Monday, 25. October 2010 13:30
Hannover Rück /
Outlook for treaty renewals as at 1.1.2011: Hannover Re subsidiary anticipates
stable prices in Germany
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              Baden-Baden, 25 October 2010: E+S Rück - which bears
responsibility for German business within the Hannover Re Group - considers the
general environment on its domestic market to be broadly favourable. Michael
Pickel, Member of the Executive Board, stated at a press conference in Baden-
Baden: "Although conditions remain difficult in some lines, including for
example motor business, I am nevertheless confident that we shall again maintain
our profitability in the coming year."

              For 2011 the company expects both market conditions and the
premium trend to remain largely stable. Looking at the various lines of
business, the picture that emerges is a mixed one. In industrial property
business the pressure on prices will be sustained. This can be attributed in
part to volume lost in the aftermath of the recent economic crisis, most notably
in the area of business interruption. In view of the fiercely competitive
climate E+S Rück intends to write its business highly selectively.

              Sustained competition can also be observed in motor business, an
important line for E+S Rück. Following premium declines and an unusually severe
winter with an adverse claims experience, the company nevertheless expects that
the premium erosion will be largely halted in 2011. Given the results on the
primary market in 2010 and the reduced interest rate level, conditions in
reinsurance are likely to improve.

              In industrial liability business the climate remains intensely
competitive on the primary insurance side. The prospects for reinsurers, on the
other hand, are more encouraging: given the importance of a very good rating for
reinsurers, the capacities available in the market will inevitably remain
limited. E+S Rück assumes that prices and conditions here will be commensurate
with the risks.

              In light of this year's natural disasters, such as winter storm
Xynthia and a number of flood events, E+S Rück expects prices for catastrophe
covers to harden. "With an eye to the upcoming round of treaty renewals our
clients will reconsider their exposures on account of the recent flood losses.
It is our assumption that additional capacities will be purchased", Mr. Pickel

              All in all, E+S Rück is again looking to attractive business
opportunities in 2011 and hopes to continue the profitable expansion of its
already large market share.

              For further information please contact:

               Corporate Communications:
               Karl Steinle (tel. +49 511 5604-1500,
e-mail: karl.steinle@hannover-re.com)

               Media Relations:
               Gabriele Handrick (tel. +49 511 5604-1502,
e-mail: gabriele.handrick@hannover-re.com)

               Please visit:www.hannover-re.com

              E+S Rück - a subsidiary of Hannover Re - is responsible for German
business within the Group, although it also has an interest in developments on
the international (re)insurance markets through retrocession arrangements with
other Group companies. By adding blocks of foreign business E+S Rück is able to
extend the geographical spread of its portfolio, hence improving its risk
diversification and stabilising earnings.
E+S Rück is the second-largest non-life reinsurer in the German market. The
rating agencies most relevant to the insurance industry have awarded Hannover Re
as well as
E+S Rück very strong insurer financial strength ratings (Standard & Poor's AA-
"Very Strong" and A.M. Best A "Excellent").

              Disclaimer: Some of the statements in this press release may be
forward-looking statements or statements of future expectations based on
currently available information. Such statements are naturally subject to risks
and uncertainties. Factors such as the development of general economic
conditions, future market conditions, unusual catastrophic loss events, changes
in the capital markets and other circumstances may cause the actual events or
results to be materially different from those anticipated by such statements.
Hannover Re and its affiliates does not make any representation or warranty,
express or implied, as to the accuracy, completeness or updated status of such
statements. Therefore, in no case whatsoever will E+S Rück and its affiliate
companies be liable to anyone for any decision made or action taken in
conjunction with the information and/or statements in this press release or for
any related damages.


--- End of Message ---

Hannover Rück
Karl-Wiechert-Allee 50 Hannover Germany

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