Home Industry News Hannover Re : extra cover against hurricane season in the USA

Hannover Re : extra cover against hurricane season in the USA

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Hannover Re has bought an extra $100 million worth of protection against possible hurricane damage claims in the United States this year, it said on Thursday.

The reinsurer bought what is in effect extra insurance cover for itself after claims from earthquakes in Japan and New Zealand and other disasters early in the year forced it to cut its 2011 profit target.

Like bigger rivals Munich Re and Swiss Re, Hannover Re is awaiting the outcome of what is expected to be an active North Atlantic hurricane season, which runs through November.

In presentations to investors on Thursday, Hannover reiterated its 2011 goals, including earning net profit of around 500 million euros ($717 million).

Aside from the fresh hurricane protection, the reinsurer has pencilled in a buffer of about 410 million euros for man made and natural catastrophe losses and has about 450 million euros worth of cover from other reinsurers in the event of big damage claims in the April-December period.

These buffers should help protect the full-year profit goal.

“We strive for lower volatility of our earnings,” Chief Executive Ulrich Wallin said on a presentation slide, adding that contract renewals with insurance company clients following the earthquake in Japan show pricing power is swinging in favour of reinsurers.

Hannover Re also predicted rising premiums and profit in its life reinsurance business in the coming years, saying it planned to continue looking for acquisitions and portfolio takeovers in the segment.

Life reinsurance gross premiums are seen more than doubling to 11.9 billion euros by 2020 from 2010, while net income in the segment is projected to rise to 477 million euros by 2020 from 220 million last year.

Hannover Life Re is expected to attain a worldwide market share of nearly 18 percent in 2020, from around 12 percent now.

Source : Reuters