R+V Versicherung AG Annual Report

Asia remained affected by the financial
crises of the 1990s. Brisk competition
among market players kept direct insurance
premiums at a low level. Only in Malaysia
and Thailand were rates in the motor insurance
class adjusted upwards after declining
for many years.
Australia/New Zealand
In Australia, the situation on the most
important sales markets showed no signs
of recovery. At 1.7% of GDP, the balance of
payments deficit reached its lowest point
since 1980. Only the construction industry
contributed more than average to economic
growth thanks to generous government
subsidies.
The insolvency of the insurance group
HIH was the most important event on the
Australian insurance market in the past
fiscal year. However, this also spurred a
recovery in rates and conditions in a number
of insurance classes and speeded up
market consolidation. At the end of the year
under review, certain types of liability cover,
e.g. medical liability, were taken over by the
government, since physicians were unable
to meet the premium increases demanded.
The bush fires which raged in the vicinity
of Sydney from Christmas until around
January 8, 2002 were the largest claim
event for the insurance sector, although this
did not affect us to any significant extent.
New Zealand’s economy was strongly
driven by domestic demand and the real
estate boom. Private consumer spending
rose 1.4% in the last quarter of the year,
corresponding to annual growth of 3.5%.
Demand developed particularly well in the
motor vehicle and real estate sectors.
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Africa
In African countries economic growth
continued almost unchanged during the
year under review, even though the external
economic shocks took their toll on this
continent too. Africa also felt the effect of
the weak global economy. The declining
raw materials prices had a serious impact
on most countries’ economies. This
development was partly cyclical, as on
the metals market, but in some cases the
changes were much more drastic; coffee
and tobacco prices both collapsed, for
example. As this pushed down exports, the
balance of payments deficit remained high
in most cases. Only oil-producing countries
such as Algeria recorded high surpluses.
Despite the negative development in the
terms of trade and the negative effects this
had on the economy, domestic demand
remained robust. Economic policy progressed
in terms of macroeconomic stability
in almost all countries, with private
investment rising. Countries experiencing
political turbulence were the exception;
output in Zimbabwe, for example, took a
nosedive and inflation skyrocketed.
Africa’s insurance markets were still characterized
by fierce competitive pressure and
political instability in many regions. This
general competitive pressure led to the
merger of a number of direct insurers, principally
in South Africa, which meant that the
number of market players fell. The reinsurance
market followed suit, a trend which
resulted in greater growth opportunities for
the remaining companies.