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