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Munich Re Report of the Board of Management
Classes of business
Life In life business, we were able to increase our premium income further.
Following a negative result in the previous year, which was due to certain
special influences, we this time recorded a significant profit, also because
of more favourable claims experience.
Gross premiums in DM million
3,446
3,539
1994 1995
Life insurance portfolios
in DM billion
377
406
1994 1995
Our premium income from German business grew only slightly, owing to a
decline in new business production. This was a reflection of the decrease
in disposable income among large sections of the population and of the
development of the maximum contribution levels for German statutory
pension insurance, which resulted in a very marked decline in adjustments
of the sums insured and premiums under “dynamic” plans. The mediumand
long-term development of life insurance in Germany will depend not
only on the economic and political climate but also to a decisive extent on
the direction taken as regards the reform of the state pension insurance
system.
Widely as the European markets differ, the financial problems currently
facing the social insurance systems appear very similar. The demand for
private provision for old age and surviving dependants as well as for
disability cover is expected to grow in all the countries of Europe. Considerations
involving the restructuring of social insurance systems through the
incorporation of elements of private provision are already creating more
demand for life insurance products.
The North American markets are characterized by continuing tough price
competition. The competitive pressure is being enhanced by the increasing
involvement in this business of banks, which, in Canada especially, are
beginning to develop into an important market factor. Both in the USA and
in Canada a growing trend towards concentration is observable. Like the
unremitting price competition, this concentration of the market is having a
detrimental effect on the growth of life reinsurance.
Asia is generally recognized as the market region of the future. We have
traditionally had a strong market position in both Japan and South-East
Asia, so that we consider ourselves to be well equipped for the growing
competition here. Markets such as China or India, with their enormous
populations, have little life insurance business as yet, but there are signs of
future growth here as well.
We entertain hopes of favourable developments in the Near East, too. In
the medium term, we are expecting a considerable economic upturn in this
region, which will be accompanied by a major demand for life insurance.
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