Hannover Re Group Africa expects growth in 2009 despite difficult market conditions
Hannover Reinsurance Group (Africa), the South African subsidiary of the global re-insurer Hannover Re reported today that despite the crash of global financial markets, the company has adequately met its targets for the 2008 financial year , Hannover Re Africa has achieved a 24% increase in gross written premiums, which amounts to close to R 3 billion. The net result was an operating profit of R244 million. This was some 15% less than in 2007 but still within the company’s targets for the year. This result is the second best in Hannover Re Africa’s history following the 2007 record result.
The company indicated that losses in the equity portfolio and increased severity and frequency of insurance claims had impacted on results, but that the impact was curtailed through cautious underwriting and investment strategies, complemented by the diversity of the company’s income streams. The complete sale of the company’s equity portfolio early on in the market slide was a painful decision at the time but proved to be a very prudent response that minimized losses and ensured excellent security for clients
In addition, it was gratifying for Hannover Re Africa to receive rating upgrades from both Standard & Poors (now A) and GCR (now AA+) in the fourth quarter of 2008. S&P noted that the group's capital adequacy remains very strong. The ratings reflect Hannover Re's strong enterprise risk management and very strong competitive position, combined with effective management strategies. This has assured ongoing solid capitalization and a sustainable long term outlook with continual access to capacity, on which Hannover Re’s clients in the local market can rely.
The company is expecting further profitable growth in 2009 – having already entered into significant new business transactions. The new business emanates from translating of intellectual property into new products and services. In addition, the business is investing in the start up of new insurance underwriters. Hannover Re Group Africa is expecting overall growth of over 20% to R3.5 billion.
Managing Director of Hannover Re Africa Achim Klennert (pictured) said: “We are privileged to find ourselves in a position to focus on developing the business despite the severe global economic downturn. We will seek to identify opportunities for partnerships that will result in strong yield and mutual sustainable growth. In addition, we intend to maximise the use of our intellectual capital to bring new products and solutions to market, again, working closely with strategic business partners.
