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Munich Re Report of the Board of Management
Gross premiums in DM million
2,736
5,473
2,353
6,521
Non-life
Life
2,549
7,030
2,673
7,453
2,844
7,638
1991 1992 1993 1994 1995
Gross premiums by class of business
Life 73 %
Personal accident/health 8 %
Motor 4 %
Credit and fidelity guarantee 8 %
Other classes 7 %
Direct insurance
The Munich Re Group includes a number of well-known direct insurance
companies in which we have had participations for many years. Our group
of direct insurers operates primarily in the area of personal lines business.
This focus on personal lines was strengthened even further in 1996: as part
of an exchange of shares with Allianz AG Holding we are acquiring DKV
Deutsche Krankenversicherung AG while parting with the industrially and
commercially oriented Hermes Kreditversicherungs-AG and a few minority
holdings. DKV, Europe’s largest health insurance company, which has
worked together successfully for several decades now with Hamburg-
Mannheimer Versicherungs-AG, ideally complements the activities of our
other direct insurers.
In the year under review, our direct insurance companies contributed a
total of DM 10,482 million to the premium income of the Group as a whole;
this was 3.5 % more than in the previous year. The growth rate in life
insurance was 2.5 % (previous year: 6.0 %) and in non-life 6.4 % (previous
year: 4.9 %). These figures do not take into account the business of the
subsidiaries acquired by Europäische Reiseversicherung in the autumn of
1995 and at the beginning of 1996. These subsidiaries recorded gross
premiums of around DM 190 million in 1995.
The considerably lower premium growth rates shown by our direct
insurance subsidiaries as compared with the previous year are a reflection
of the development of the economy as a whole, which – together with
increases in taxes and other charges – has led to a reduction in the
disposable income of private households and to a serious decline in new
business in the German life insurance market. The rise in the German
gross domestic product of only 1.9 % and the increasingly intensive
competition resulting from deregulatory moves had the effect of reducing
premium growth in the non-life classes of insurance as well. The exception
was credit insurance, where the strong increase in the number of company
insolvencies ensured that demand for this type of coverage remained high,
although this also resulted in very high claims expenditure.
The division of gross premium income between the various classes of
insurance is much the same as in the previous year: just under three
quarters of the direct insurers’ gross premiums again came from life
insurance.
The consolidated net premiums increased by 3.2 % to DM 9,706 million
(previous year: DM 9,406 million).
The underwriting profit in non-life insurance business (before the change
in the claims equalization provisions) decreased by DM 66 million to
DM 31 million. This is attributable above all to the unsatisfactory situation
in credit insurance.
The underwriting profit in our life insurance business – which, in
accordance with the accounting regulations, includes the entire investment
income and expenditure – rose by DM 79 million to DM 444 million. The
life insurers allocated a total amount of DM 1,947 million (previous year:
DM 2,008 million) to the provisions for policyholders’ dividends.
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