Hannover Re
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Lower capacity will have an effect, but the company hopes to avoid severe retro rate rises. -
CEO Michael Pickel says Covid-19-related losses and the low interest rate environment have made price increases “absolutely essential”.
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The carrier participates in payout schemes to policyholders despite doubts over coverage.
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The company acts as reinsurer and shares the risk with the Natural Disaster Fund.
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The retro vehicle has only picked up a small share so far but this will grow.
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The P&C business posted a EUR167.9mn underwriting deficit on EUR380mn in Covid-19-related losses.
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The carrier took a separate EUR220mn charge connected to Covid-19 losses.
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The firm said it expected its solvency ratio to be comfortably above its requirements.
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The firm's K sidecar avoided major Dorian claims, as the firm also grew its whole-account covers.
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This came as major losses ceded to retro partners reached EUR541mn.
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As per previous bonds, the transaction is fronted by Hannover Re.
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The deal's spreads are in line with those on the 2019 FloodSmart deal, with slightly higher multiples of premium to risk.
