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The Deutsche Rück Group's gross premium income rose by 2.3 % to €1.2 billion in 2017. As well as a slight improvement in the operating result before tax, the Group, consisting of Deutsche Rückversicherung AG and its subsidiary Deutsche Rückversicherung Switzerland Ltd, once again achieved good investment income. Equity capital before appropriation of profit rose by more than €17 million to €529.2 million. "Deutsche Rück has continued its solid performance of previous years with a combination of growth and a strengthening of its assets," CEO Frank Schaar said.
Growth in gross premium income to €1.2 billion came from non-life and life reinsurance and was attributable to connections in both Group of German Public Insurers and market business.
In terms of claims, the positive trend from previous years continued. In particular, liability, accident and motor insurance business as well as fire business contributed to the improvement in the gross loss ratio from 58.1 % to 56.0 %. Expenses for insurance operations remained stable at the parent company and fell significantly at DR Swiss. This is reflected in the improvement of almost six percentage points in the net expense ratios for the business as a whole (to 30.6 %) and non-life business (to 29.3 %). "The Deutsche Rück Group thus remains highly competitive in relation to other reinsurers," Mr Schaar said.
The good performance of previous years continued with a combined ratio in non-life business of 96.4 % in net terms. "At the same time, we're maintaining our policy of very conservative allocations to provisions," Mr Schaar said. The equalisation reserves were strengthened significantly by €23.8 million.
In view of persistently low interest rates, the Group is highly satisfied with its investment income, which, at €57.2 million, is well above the previous year's figure of €41.3 million.
Including the technical result, the Group achieved a slightly improved operating result before tax of €24 million. After deduction of tax expenses, which had almost doubled owing to changes in tax legislation, this positive result led to a net profit for the year of €3 million.
A change in the business model in residual credit business is expected to lead to a significant reduction in gross premiums in the current financial year. "We also expect some of our cedants to increase their retentions," Mr Schaar said. "However, we will offset most of this decline through increases in our share and natural growth." The negative impact of storms in the spring of 2018 was in line with Deutsche Rück's expectations.
Frank Schaar, CEO