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WEDNESDAY OCTOBER 31 2018
Hannover Re eyes
solid growth in Asia
Costly cat year will impact pricing in Asia-Pacific
2018 IS SET TO BE THE MOST COSTLY
catastrophe year for Asia-Pacific since
2011, leading to potential rate hardening
at renewals, but the impact is likely to be
restricted to countries hit directly by losses,
Michael Reynolds, global chief executive
officer of JLT Re, told SIRC Today.
“It’s difficult to provide any granular
commentary on rates at this point as it is early
and a lot can still happen,” said Reynolds.
“As things stand, outcomes are likely to vary
significantly by territory, particularly for
Reynolds suggested there could be some
short-term rate hardening for wind and flood
at the new year’s renewals, given the series
of significant cat losses in Japan in Q3 from
typhoons Jebi, Trami and Kong-rey.
Typhoon Mangkhut also grabbed headlines,
with AIR Worldwide estimating insured losses
in mainland China, Hong Kong and Macau to
be between $1 billion and $2 billion.
CCR Re to grow
HANNOVER RE HAS A “FAIRLY STRONG
appetite” for Asian business and it wants to
participate in the region’s potential significant
growth despite the high competition in the
market, Michael Marx, managing director
Asia-Pacific, told SIRC Today.
There is fierce competition on many lines
of business in the region, but Hannover Re
believes it can protect its bottom line on the
primary and the reinsurance sides of the
business as it expands its business in Asia.
The ability to find adequate returns is a
real challenge in the Asia-Pacific market, Marx
admitted. “In some markets you see quite
substantial premium growth on the direct
side of the business but that does not result in
reinsurance profits in a satisfactory way,” he said.
“Many reinsurers in parts of Asia are not
earning their capital cost. That is a concern.
We need to keep working on that.”
At the same time, Asian countries, excluding
Japan, are not buying enough cat cover overall,
neither catastrophe excess of loss coverage nor
any other solution such as cat bonds which
would be necessary in order to close at least
parts of the protection gap, he said.
Nevertheless, Hannover Re has been
growing substantially in the Asia-Pacific
region over the past five years focusing on
working with strategic partners, Marx noted.
The Asian region contributed €2.54 billion
in gross written premium to the group’s
total of €17.79 billion in 2017, an increase
from €2.42 billion in 2016, according to the
company’s annual report.
In the Asia-Pacific region Hannover Re
has been focusing on offering bespoke and
tailored solutions which involves proportional
business with a particular focus while offering
capital management solutions and enabling
more capacity for cat perils. “We plan to
continue to grow in these areas,” Marx said.
Hannover Re is interested in writing cyber
business in (continued on top of page 2) Michael Marx >>
“Losses in Indonesia, the Philippines,
Thailand and China could likewise manifest
themselves at January 1 by bringing about
marginal pricing increases, or at least
stemming rate reductions in China,” he said.
Reynolds suggested modest rate decreases
are likely elsewhere in the region, although
there could be some pressure on pro rata T&Cs.
“These events have once again highlighted
substantial protection gaps that exist across
Asia-Pacific (continued on bottom of page 2) >>