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.