German reinsurance giant Hannover Re is “well on track” to achieve its 2018 year-end target of a 10 percent hike in gross premiums despite intense competition continuing to weigh in and shape pricing.

Based on constant exchange rates, the company anticipates an increase of more than 10 percent in its gross written premium volume and net income in excess of EUR1bn for its total business.

At a press conference in Monte Carlo out-going CEO Ulrich Wallin said the GWP boost will remain in line with targets providing the reinsurer does not exceed its major loss expenditure budget of EUR825mn.

Financial results posted by some companies deteriorated sharply in 2017, mainly due to major losses incurred as a result of the HIM hurricanes and wildfires - Hannover Re said results in 2018 have also been impacted by follow-up losses from natural disasters.

At the same time, the reinsurer described capital resources available to most insurers as good, as is also reflected in retention levels which are still high, suppressing demand for reinsurance coverage.

The insurance-linked securities market also continues to provide considerable capacities, adding to the pressure on prices and conditions, Wallin said.

Looking into 2019, Hannover Re anticipates stable prices and conditions following last year’s succession of large loss events.

The company said the market environment in worldwide property and casualty reinsurance remains challenging. The enormous natural catastrophe losses of the past year led to an increase of reinsurance rates in affected regions and programs, which however were lower than expected.

Competition continues to be intense and is clearly shaping the pricing situation, the carrier said. However, the company forecasts stability in prices and conditions overall for the treaty renewals as at 1.1 2019.

“The further development of the loss amounts from last year’s hurricanes as well as the minimal large losses incurred in the current year to date will be crucial in determining prices in property and casualty reinsurance”, Wallin said.

“The lower the strains from catastrophe losses turn out to be this year, the more difficult it will be to push through requisite additional price increases in the coming year. Nevertheless, we are seeing strong demand and hence rather favourable opportunities for growth in certain segments.”