R+V Versicherung AG Annual Report

Apart from the extraordinary burden of the
terrorist attacks in the US, 2001 also saw
a large number of large claims. These
included the explosion at a fertilizer plant
near Toulouse/France, the earthquake in
El Salvador, tropical storm “Alison” in the
southern US, typhoon “Nasi” in Taiwan and
the total loss of the “Petrobras” oil platform
off the coast of Brazil.
Western Europe
Growth in industrialized countries of
Western Europe declined to an extent not
seen since the beginning of the 1990s.
While the Japanese economy once again
slid into recession, the economy in the
European Union continued to grow for a
time; nevertheless these countries were
increasingly caught up in the global economic
downturn. Of the large countries, the
UK was the only economy that remained
robust. International trade declined, leading
to a correspondingly pronounced downturn
in industry. While private consumption
remained robust in many cases, corporate
investment generally declined. The labor
market did not remain unscathed either,
with the slight improvements previously
seen tailing off again.
Inflationary trends which had increased in
2000 and were ultimately responsible for
the central banks’ restrictive measures,
weakened in 2001, partly thanks to the
drop in oil prices. The core inflation rate
remained persistently high, however.
8
Monetary policy was relaxed during the
course of the year in reaction to the economic
slump. Interest rates were lowered
once again in a concerted effort following
the terrorist attacks in the US. All in all, the
central banks were on a clearly expansionary
course, while financial policy was relatively
restrained.
In terms of exports, countries which had
specialized in IT products suffered the
greatest setbacks, losing global market
share. Finland, which had reported export
growth of up to 20% in the previous year,
posted a decline in exports in the year
under review. What was surprising was that
trade within the European Union declined at
times, even though domestic demand
expanded in most member states.
Exports and imports in the majority of
countries and regions generally developed
along the same lines, especially since economic
development was surprisingly parallel,
both in relation to the strong upswing
until mid-2000 and to the downturn. Since
exchange rates hardly fluctuated, the
balance of trade and balance of payments
for the individual countries changed very
little overall.
The European insurance markets bottomed
out at the beginning of the year under
review and direct insurance rates began to
develop positively again in a number of
markets. However, these increases were
unable to offset claims losses, which
remained unsatisfactory. The impact of
large claims remained moderate in the first
half of the year, with the main events being
the sinking of the oil platform off the
Brazilian coast and tropical storm “Alison”
which led to severe flooding in the southwest
of the US.