Hannover Re has increased it’s premium price for hurricane an earthquake losses, as the reinsurer renewed it’s contracts with insurers last month (January).
Hannover, the third biggest reinsurer in the world, “expressed satisfaction” and said the news made then optimistic about the year ahead.
“We achieved better conditions and rates on average than in the previous year,” chief executive Ulrich Wallin said.
The price increases in the new contracts were in around 3 to 6 per cent, the companyreported.
“In segments affected by natural catastrophes, the price increases were particularly marked,” Wallin said.
An unusually large amount of natural catastrophes last year such as the Japan tsunami, New Zealand earthquake and Australian floods caused billions of dollars of losses for reinsures.
The large number of disasters resulted in reinsurer taking on a bigger proportion of losses than expected, putting a strain on the equity capital of many business and making it harder to write new business.
On top of this, low interest rates also damaged the investment income of reinsurers pushing prices up further.
About two thirds of Hannover’s non-life reinsurance business premiums were up for renewal at the start of the year, and the group said it boosted the volume of renewed premiums by 6 per cent to €3.69 billion (£3.7m).
Hannover Re said it expects to post net profit of at least €500 million (£415m) in 2011 and possibly pay out more than 40 percent of it as a dividend.