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Munich Re Report of the Board of Management
Altogether, we do not anticipate a significant improvement in the premium
income from our domestic reinsurance business in 1996. The result is likely
to be much the same as in the previous year, provided we are not affected
by any exceptional developments in the area of natural catastrophes or
other major losses.
Rest of Europe From our business in the rest of Europe we recorded a premium income
of DM 3.9 billion as compared with DM 4.4 billion in the previous year.
The main reason for this 12.3 % decline is, apart from the negative effects
Gross premiums in DM million
of changes in exchange rates, our selective acceptance policy. Develop-
4,682
4,427
ments in individual markets did differ, however.
3,650
4,133
3,881
For us the UK is, after Germany, still the country from which we derive the
largest premium volume in Europe. Our UK clients are above all the large
composite insurers, most of which operate internationally, and Lloyd’s.
1991 1992 1993 1994 1995
Gross premiums by country
UK 23 %
Netherlands 12 %
France 11 %
Switzerland 11 %
Italy 10 %
Austria 10 %
Other 32 countries 23 %
The results of our UK business have improved markedly in the last few
years, owing to the fact that in many areas of business we were able to
achieve rate increases that had become urgently necessary as a result of
large claims burdens from natural catastrophes and other major losses. In
the course of the year under review, however, price competition became
keener again.
We have been represented in London for many years by our Main
Representation Office and by two branch offices that chiefly handle
local British business. In contrast, our British subsidiary, Great Lakes
Reinsurance Company (UK), London, writes international business and is
also available for special business segments. The latter was able to
increase its gross premium income in the year under review by 31.5 % to
£96 million (previous year: £73 million) and to make a satisfactory profit.
In the Netherlands we have managed to maintain our important market
position, despite the trend towards a decline in reinsurance volume. In
view of the lively developments taking place in the direct insurance
market, especially in the area of employee benefits products, we see
good opportunities for an expansion of our portfolio in the future.
In France, Belgium and Luxembourg we again achieved a satisfyingly
positive result, since we were largely spared claims burdens from natural
catastrophes and other major losses. Despite keener competition among
the reinsurers, we have been able to improve our position in various
classes of business during the current business year.
In Switzerland the process of deregulation continues. Since 1st January
1996 general insurance conditions and rates have to be approved only in
life and health insurance, and in the area of coverage for natural hazards.
The trend towards concentration within the Swiss insurance market,
observable for many years now, is having the effect of further increasing
competition.
Since 1994 our Swiss subsidiary, the New Reinsurance Company, Geneva,
has been concentrating its activities on certain European markets, Israel,
Turkey and, through its office in Singapore, the growth markets of Asia,
including Japan. This geographical reorientation meant that its gross
premium income for the year 1995 decreased to Sfr 458 million (previous
year: Sfr 558 million). Its reinsurance underwriting result deteriorated
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