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Munich Re Report of the Board of Management
The situation throughout the African continent is overshadowed by the
continuing rapid spread of AIDS. In many markets this has seriously
affected, if not completely paralysed, the development of the life insurance
industry. Only in South Africa, where the risk has been reduced through
efficient underwriting and appropriate product design on the part of
insurers and reinsurers, do we see medium-term business opportunities for
life and health insurance products.
In Latin America the privatization of the social insurance systems is
continuing. As a result, new business opportunities are opening up here
for reinsurers.
Personal accident/health Our personal accident premium volume decreased as a result of a
reduction in premium income from our foreign business. We did, however,
achieve a very pleasing profit of the same order as in the previous year.
Gross premiums in DM million
1,367
1,209
1994 1995
1995
Loss ratio 64.4
Expense ratio 30.6
Combined ratio 95.0
Our clients do not reinsure much of their personal accident business,
largely retaining it for own account. Our opportunities for expansion in this
sector are therefore limited. Our capacity is increasingly in demand,
however, in cases where additional protection is required for large risks
or where state systems are being privatized. For the current business year
we are therefore expecting slight growth with continuing good results.
The premium income from health business decreased, as had been
expected after the previous year’s boost due to a special influence. The
profit was much the same as in the previous year.
Private health insurance is a growth sector everywhere in the world. The
state health insurance systems are increasingly coming up against
the limits of what is affordable. The consequences are often restrictions
of cover or the exclusion of certain benefits from the range previously
provided. The market for private insurance protection is opening up as a
result.
In the Netherlands, for example, a change in legislation means that in
the private sector it is now employers who are required to continue
payment of wages to their employees when they fall ill. This gives rise
to a considerable additional risk for the employers, who are seeking the
necessary coverage from the private insurance industry.
In view of these changes, we are expecting to see a marked increase in
premium income in 1996, with continuing good results.
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