Annual Report 2011 - R+V Versicherung

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Business development and basic conditions / Overview of the business development of R+V Versicherung AG
South. In spite of a high, above average number of tropical
storms, the USA was spared severe hurricanes, with the exception
of Hurricane Irene, in the second half of the year.
In the Canadian reinsurance market, growth pressure in the
major companies led to further consolidations. On the loss
side, 2011 was characterised by several major fires. In particular
the fire in the city of Slave Lake showed a high concentration
of risks in some companies. On the reinsurance side,
the losses only impacted the programmes that were directly
affected. In the direct insurance industry, a stabilisation of
rates at a low level was noted in the private client and in the
trade and industry business.
The upward trend in the Latin American economy clearly
continued in 2011. Countries such as Brazil, Chile, Colombia
and Peru were again candidates for particular emphasis in this
context. The commitment of foreign insurance companies in
the region continued especially due to the part of Spain. As
before there was sufficient reinsurance capacity available
in South America. The positive technical price awareness
recorded in the main markets in the previous year dwindled
as competition increased. With solid growth, Brazil continued
to be the largest insurance market in Latin America by far.
In Japan, one of strongest earthquakes ever recorded and the
tsunami it caused led to devastating damage to property and
personal injury. An estimated 16,000 people died and a further
5,000 are still considered missing. The macro-economic losses
were estimated at over 300 bn US dollars and insured losses at
over 30 bn US dollars. Both the direct insurance costs and the
reinsurance costs for earthquake cover increased dramatically
in response to this event.
In the first quarter of the year the Australian state of Queensland
was affected by several natural disasters. Both the floods,
which in terms of size covered an area equivalent to France
and Germany and also affected the densely populated city of
Brisbane, and cyclone Yasi resulted in considerable insured
losses. In addition to this, an offshoot of the cyclone caused
large-scale flooding in the state of Victoria near the city of
Melbourne several thousand kilometres away. The renewal
of reinsurance policies was in this respect marked by huge
price increases.
After the New Zealand city of Christchurch was hit by a major
earthquake in September 2010, another one followed in
February almost directly underneath the centre of the country’s
second largest city. The consequences of this earthquake
will be difficult to overcome for many years to come as large
areas of the city centre were destroyed. In addition, aftershocks
led to further, but more minor damage to property.
The reinsurance cover by the insurers could only be placed
with significant price increases.
2011 was also a challenging year for other parts of Asia.
Although economic growth continued strongly, concerns over
financial stability in European countries and the US economy
slowed the tempo. The floods in Thailand turned out to be
probably the most costly event in South East Asia. Although
the direct insurance companies hardly had to offset any losses
in the private sector due to the low insurance density for flood
cover, high losses were incurred as a result of breakdowns in
the chain of suppliers and production sites of multinational
companies, the amount of which has not been possible to
estimate to date.
Overview of the business development
of R+V Versicherung AG
Against the backdrop of a year marked by natural disasters,
the business development of R+V Versicherung AG turned out
to be satisfactory in 2011. Premium volume rose by 8.8% to
1.5 bn euros compared with the previous year. Adjusted by the
foreign currency effect, premium growth was 8.2% compared
with the same period in the previous year. Within premium income,
the share of non-proportional reinsurance rose to 29.4%
(2010: 27.1%).