HANNOVER, Germany, Sept. 13, 2001 (PRIMEZONE) --
The Hannover Re NewsLetter serves to provide institutional investors, financial analysts and journalists with background information on developments in the world of reinsurance including severe loss events, as well as to share new developments at Hannover Re.
Horrified by the acts of terror in the USA
Hannover Re will endeavour to settle claims quickly
Hannover, 13th September 2001: Hannover Re is deeply shocked by
the acts of terror in the USA. Our sympathy and condolences are
with the relatives of the victims of the attacks in New York,
Washington and Pittsburgh, stated the Chairman of Hannover Re,
Wilhelm Zeller. We especially offer our sympathy to the families
of our business partners and friends who have been killed in this
catastrophe. All the staff of Hannover Re in New York as well as
the offices of its subsidiary, Clarendon Insurance Group have
survived the tragedy unharmed.
The American market, which contributes 52% of the premium of our
complete portfolio, is Hannover Re's largest single market, which
means that we will be affected by losses in various lines of
insurance as a result of these terrorist acts in the USA. The
losses will be reflected in all the business segments of the
company.
The most substantial losses will affect Hannover Re as a result
of its participation on the aviation policies of American and
United Airlines. These policies not only cover the loss of the
aircraft but also the bodily injury and property damage caused by
the four crashes. The limits of coverage of these policies for
third party liability are USD 1.5 billion per event.
Due to the four separate attacks, this will result in four
separate loss events. It is to be expected that the claims
arising from the events in New York and Washington will exceed
the individual coverage limits of USD 1.5 billion. The coverage
for claims arising from the crash of the fourth aircraft near
Pittsburgh should to the best of our current knowledge be
sufficient.
The World Trade Center in New York had coverage for property
damage of USD 4.1 billion and coverage for business interruption
of USD 0.4 billion. On top of this will be various individual
insurance policies for property damage and business interruption
relating to over 1200 firms, which had offices located in the
World Trade Center. At present, there is no concrete information
relating to the insurance of the other damaged buildings.
Other losses are to be expected from the insurance policies of
the dead and injured victims.
On the basis of the information currently available to date,
Hannover Re estimates a EUR 400m negative effect on its 2001
results. This exposure will however have no effect on the
financial stability of Hannover Re.
These loss events will also have a supplemental effect on the
insurance markets that have already hardened. As a result, the
rates for primary insurance and reinsurance are expected to
increase even more significantly. It is therefore to be expected
that the conditions at the upcoming renewals of both primary
insurance and reinsurance contracts for 2002 will significantly
improve so that the losses from these tragic events will soon be
recuperated in subsequent years.
For further information, please contact Ralf Arndt tel.
+49/511/56 04-15 00; fax +49/511/56 04-16 48, e-mail
ralf.arndt@hannover-re.com.
The Hannover Re Group, with gross premiums of approx. EUR 8.3 bn., is the fifth-largest professional reinsurer in the world. It transacts all lines of property/casualty, life/health, financial/finite-risk reinsurance as well as US-program business and maintains business relations with more than 2,000 insurance companies in over 100 countries. Its world-wide network consists of more than 100 subsidiaries as well as branches and representative offices in 20 countries. The American rating agencies Standard & Poor's and A.M. Best have awarded Hannover Re their second-highest rating of AA+ ("Very Strong") and A+ ("Superior"), respectively.