Hannover Re sees gains in motor insurance recovery
FRANKFURT, June 29 (Reuters) - Hannover Re (HNRGn.DE) said on Friday it is poised to gain from a recovery in Germany's 20 billion euro ($27 billion) motor insurance market as a multi-year price war that dented premiums finally ends.
"The competition seemingly is over and the rates in motor have levelled off ," Hannover Re board member Juergen Graeber told an investor conference monitored on the Internet.
Germany's auto insurers -- listed companies and mutual insurers -- have been slashing prices to gain or hold market share in Europe's largest motor insurance market.
But some companies, such as market leader Allianz (ALVG.DE) and Munich Re's (MUVGn.DE) insurance unit ERGO ERGG.DE, as well as insurance industry association GDV have said they expect premiums to begin rising again after hitting a trough this year.
Germany has a high share of premiums that are controlled by mutual insurers, which have less volatility, Graeber said.
Hannover Re has extensive relationships with mutual insurers through subsidiary reinsurer E+S, in which Hannover Re now holds a 66 percent stake after increasing its shareholding earlier this year to consolidate more of E+S's motor volume.
"This is in line with our strategy to add mutuals' low volatility business," Graeber said.
Germany also has more car insurance policies than drivers, meaning the number of accidents per policy is declining, which also helps underwriting profit, Graeber said.
"When you have 45 million policies but only 28 million drivers, the frequency (of claims) has to come down," he said.
Hannover Re Chief Executive Wilhelm Zeller said the company drew strength from its solid position in its home market.
"The German non-life market is by far the most profitable one and the most stable one," he said.
A presentation on Hannover Re's Web site showed it repeating its forecast of achieving return on equity of at least 15 percent this year, with a dividend pay-out ratio of 35-40 percent.
((Reporting by Jonathan Gould; Editing by David Cowell; Reuters Messaging: jonathan.gould.reuters.com@reuters.net; +49 69 7565 1242))
($1=.7437 Euro) Keywords: HANNOVERRE MOTOR
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