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Munich Re Report of the Board of Management
North America In the North American market we achieved a total premium income in the
year under review of DM 3.1 billion as compared with DM 2.6 billion in the
previous year. This marked increase of 19.4 % is mainly attributable to our
Gross premiums in DM million
assumption of a portfolio of liability business in return for a single premium
3,124
3,124
payment.
2,672
2,617
In the USA, the world’s largest insurance market, non-life insurers were
2,234
spared major losses in the year under review. Nevertheless, the claims
costs from various individual loss events were considerable, overall claims
incurred having been higher only in the years 1992 and 1994. The need
to set up additional reserves for asbestos and environmental impairment
losses also had a noticeably negative effect on the underwriting result
for the market as a whole. These strains were, however, more than
1991 1992 1993 1994 1995
compensated for by high investment earnings. Competition among
direct insurers therefore continues to be intense.
Gross premiums by country
USA 81 %
Canada 19 %
The reinsurers’ non-life results were pleasing, if one excludes from the
figures the substantial additional reserves that were set up by two
companies, one of which was American Re.
The US life insurance market is characterized by tough price competition
and an increasing trend towards consolidation. The remaining direct
insurance companies are tending to require less reinsurance coverage.
Our non-life subsidiary, Munich American Reinsurance Company,
New York, was able to increase its gross premium income by 4 % to
US$ 749 million (previous year: US$ 720 million) despite the tight
competitive situation. The company’s reinsurance underwriting result
improved noticeably, as remedial measures began to have a visible effect
and no major natural catastrophes occurred either. The profit for the year
increased significantly, from US$ 5.9 million in the previous year to
US$ 40.0 million.
Munich American Reassurance Company, Atlanta, which is a life
reinsurance specialist, increased its gross premium income by 29.1 % to
US$ 222 million (previous year: US$ 172 million). Claims experience was
less favourable than in the previous year; the financing costs for new
business were also greater. Overall, the company showed a deficit of
US$ 3.8 million, following the small profit of the previous year.
Great Lakes American Reinsurance Company, New York, has been
operating as an independent subsidiary within the Munich Re Group since
1st October 1994, concentrating mainly on US broker business. In the
year under review it recorded a gross premium income of US$ 60 million,
following US$ 17 million in the abbreviated financial year 1994. The
reinsurance underwriting result was distinctly negative, owing to the
strengthening of reserves. Overall, the company achieved a small profit
for the year of US$ 1.0 million.
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