MONTE CARLO (Thomson Financial) - Hannover Rueckversicherung AG said it expects rates for natural catastrophe cover to remain stable in the upcoming January contract renewals, with increases expected in the areas affected by recent major loss events such as the winter storm 'Kyrill', UK floods and storms/floods in Australia.
'We are cautiously optimistic but we take it as it comes,' chief executive Wilhelm Zeller said at a reinsurance industry convention.
All in all, Hannover Re anticipates no significant deterioration in the catastrophe prone property market, but considers an ongoing softening likely in the US casualty market.
The reinsurer forecasts stable to increasing rates in windstorm programmes, but anticipates declines in aviation.
While property catastrophe and marine are still the hardest segments, all others are heading for a soft landing, according to the CEO.
Regarding the North American property market, management board member Hans-Dieter Rohlf said the pricing for natural catastrophe business is now mainly driven by modelling data. This offers a buffer against the declining rates but could be affected by market forces - particularly if hurricanes continue to abstain, he said.
In the North American casualty line, competition has resulted in accelerated rate reductions in the primary market and pressure has recently also arrived on the reinsurance side, Rohlf said.
He considers reinsurance margins to still be at an attractive level but expects them to continue shrinking in 2008.
Asked about the consolidation of the reinsurance market that is foreseen by several ratings agencies, CEO Zeller stressed that Hannover Re is not interested in making acquisitions in the non-life sector and also does not expect to be taken over.
'But we are very much interested in acquisitions in the life reinsurance business,' Zeller said, adding that Hannover Re will look into all possible opportunities there. judith.csaba@thomson.com jcs/ra COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.