Our Strategy

In the cyclical markets and lines of business of Non-Life Reinsurance, Hannover Re does not pursue volume, growth, or market-share objectives, but operates with a clear focus on achieving an adequate return on equity. For each major market and each important class of business we assess capital requirements corresponding to the inherent risk structure of our assumed portfolio. Based on the assessments, for which we use sophisticated risk based capital models, the required amount of capital will then be allocated to each market and each class of business. Thus we ascertain that we can duly differentiate between loyal partners and profitable markets on the one hand and markets or classes governed by a more opportunistic approach on the other hand.

Our underwriters are responsible for achieving the return on capital as determined by our model. It gives them an instrument to adjust their underwriting criteria according to the performance of each market and each class. Depending on the degree of return on capital achieved, we manage reinsurance cycles differently in each market or class. Narrow margins in hard market phases will necessarily call for a selective approach in soft market phases. We do enjoy, however, many loyal partnerships in many markets, for which our allocation model gives our underwriters an instrument to fully justify an allocation of returns over more than one year or even over the full cycle.