Hannover Re , the world’s third-biggest reinsurer, said it saw reinsurance prices rising by 3-8 percent next year, a brighter outlook than that of its two bigger rivals.
“It is our expectation that the favourable trend in reinsurance premiums will continue in 2012,” Hannover Re Chief Executive Ulrich Wallin said on Monday, adding that price rises were expected also outside the business lines affected by the earthquakes in Japan and New Zealand earlier this year.
“At the start of 2011, we had to fight to keep prices stable. That has changed since the Japan earthquake,” Wallin said.
Wallin said the favourable outcome of contract talks with insurance companies in April and July backed his forecast for price rises next year.
Reinsurers are meeting at the Mediterranean resort of Monte Carlo for their annual jamboree. Talks with their insurance company clients for reinsurance contracts covering 2012 begin in earnest in the coming weeks.
In contrast, Hannover’s two bigger rivals, Munich Re and Swiss Re said they see only slight to modest price increases ahead.
Swiss Re manager Brian Gray said he expected a broad market turn over the next three to 15 months.
Insurance brokers present in Monte Carlo say they see the pricing power of reinsurers relative to their insurance companies as still too weak to make much headway on prices.
Hannover Re on Monday also confirmed its goal of earning 500 million euros ($685 million) in net profit this year after estimating it would see only a modest hit from Hurricane Irene.
The company said it expected claims in the low double-digit million euro range from the hurricane, which struck the eastern coast of the United States late last month.
Munich Re said it expected its damage claims from Irene would be in the low triple-digit million euro range, against a background of insured industry losses of about $7 billion from the storm.
Hannover Re’s share closed down 3.9 percent at 29.31 euros, outpacing a 4.3 percent drop in the STOXX Europe 600 insurance index . Munich Re shares fell 2.6 percent, while Swiss Re fell 3.0 percent.
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