Hannover Re generates best result in history in 2006

Hannover Re said it generated the best result in the company’s history in 2006.The Group reported a 2006 net income of EUR514.4 million [Cdn$799.8 million] and a return on equity of 18.7%. The companys combined ratio in 2006 stood at 98.4%”Not only did we meet our targets, we surpassed them and recorded the highest group net income in our company’s history,” CEO Wilhelm Zeller announced at this year’s press briefing on the annual results in Hannover.In contrast to the two previous years, the incidence of catastrophe losses was significantly below average in 2006, the company noted in a press release.Although some large losses were recorded, including for example a satellite loss, three fire claims in Germany and cyclone Larry in Australia, total net expenditure on major losses came in at a mere EUR107.3 million [Cdn$166.8 million], the company announced. This figure corresponded to 2.7% of net premium in property and casualty reinsurance and was thus well below the expected level of 8%.Hannover Re said the business development in property and casualty reinsurance was distinctly favourable, and almost all segments offered good opportunities to write profitable business.On balance, rate increases were obtained for the seventh time in succession, Zeller said.This was made possible by the adjustment of pricing models to reflect the experience of the 2005 hurricane events and by the shortage of reinsurance capacity for catastrophe covers, Zeller said. In this segment, rate increases of 100% or more were achieved. Nevertheless, other property business also held stable. Developments in casualty lines were relatively gratifying; here too prices on the reinsurance side – with certain exceptions – were stable.All in all, the prevailing market conditions in property and casualty reinsurance continued to be commensurate with the risks and were therefore attractive.