Sustainability Report 2015
Sustainable insurance solutions
The Hannover Re Group transacts all lines of property & casualty and life & health reinsurance worldwide. By delivering sustainable insurance solutions such as microinsurance and agricultural insurance products we contribute to social development in structurally deprived regions. These protect people with scant financial means against fundamental risks such as illness, disability, the consequences of natural disasters or crop failures. In our sustainability strategy we have set ourselves the goal of further expanding sustainable reinsurance solutions and stepping up our collaboration with primary insurers
Solutions in property & casualty insurance
Demand for the insurance of agricultural land and livestock continues to grow, especially in view of a steadily rising need for food and the effects of climate change. This is especially true of developing countries. In 2015 we wrote premium in the mid-triple-digit millions (EUR) in the area of agricultural risks, with around three-quarters of the total amount coming from developing and emerging markets in South America, Asia and Africa.
Safeguarding agricultural production is particularly important for the development of poor regions. In the year under review we therefore embarked on cooperation projects with governments and international organisations with the goal of expanding agricultural insurance. In Peru, for example, our involvement enables more than 450,000 peasant families to insure their crops against damage from flood, drought, hail or frost and hence rely on a secure minimum income. In Burkina Faso our engagement enabled 6,200 farmers to obtain insurance coverage for their cotton production.
Particularly in view of the considerable risk potential, minimising adverse environmental effects is a key goal for Hannover Re. With this in mind, we are always interested in working together with our clients to develop insurance solutions specifically designed to deliver environmental benefits.
In cooperation with our partners "Energi" in the United States and "b2bProtect" in Europe, we offer concepts that create incentives for businesses to invest in energy-saving technologies. In this connection Hannover Re covers the energy savings warranties given by energy service providers. Building on successes in Germany, the coverage solution was also rolled out in other European markets. Working together with its partner "b2bProtect", Hannover Re has also developed parametric weather insurance products for its customers that enable companies to protect themselves against interruptions and losses. These help to alleviate the impacts on business operations of adverse weather situations, which are becoming increasingly severe against the backdrop of climate change.
Generally speaking, insurance can create incentives to invest because the possibility of receiving deficiency payments makes the investment decision easier. The "Energie Einspar Protect (EEP)" programme, for example, incentivises private and commercial customers to invest in energy-saving technologies and solutions through the guaranteed return on investment.
Through our activities in the area of Insurance-Linked Securities (ILS) we support work on index-based Disaster Finance concepts for countries in South America and Asia. These would enable such countries to access funds in a short space of time should a natural disaster occur. The money could then be used immediately for first aid, helping the uninsured, repairing infrastructure and even to make up for lost tax revenues. Only a small number of these concepts have been realised to date. Nevertheless, organisations such as the World Bank have given their seal of approval to the development of these types of risk management concepts on the country level.
Solutions in life and health reinsurance
On the life and health reinsurance side, Hannover Re is active in the area of government-assisted health microinsurance solutions. Poor sections of the population receive basic coverage for the most important hospital treatments through state-subsidised covers offered by private and government health insurers alike. These programmes are able to reach millions of insureds thanks to their respective government's support. In addition to assisting with risk management functions, we help our customers and the various government agencies in particular with securing on a lasting basis and further expanding the development and supervision of these state-supported health insurance programmes for poorer sections of the population. In India we have been actively involved in the microinsurance market from the outset, with a growing business volume. The microinsurance sector is also expanding in less mature markets such as Pakistan, the Philippines and Indonesia. Here, too, we offer appropriate products in cooperation with primary insurance partners.
Furthermore, we support and promote holistic lifestyle insurance concepts that are geared to insureds' healthy living and factor this accordingly into the pricing. The design and marketing of these insurance products is similarly carried out in cooperation with primary insurers and local partners. Initially rolled out in selected markets, the concept is being extended to other international markets such as North America, Asia and Europe after enjoying a thoroughly positive response. The combination of insurance protection and an informed and healthy lifestyle are the key drivers behind the considerable appeal and (continuing) dynamic growth of this concept.