Hannover Re is set to handle its own facultative property underwriting in Australia from 2011, bringing an end to its 16-year-old agency agreement with Melbourne-based Southern Cross Underwriting.

The reinsurer, which established its own underwriting operation in 2004, says risks accepted by Southern Cross on its behalf will run off to expiry.

Southern Cross is authorised to bind Hannover Re for facultative property risks until December 31 next year. Capacities will gradually reduce until the formal termination date.

Chief agent for Hannover Re’s Australian branch, Ross Littlewood, told insuranceNEWS.com.au the reinsurer has “cautious plans” to grow this side of its underwriting business. 

Southern Cross MD Larry Bartle says his company is well advanced in negotiations to build business over the next 15 months with other reinsurers who are already supporters.

“We’re speaking with some terrific reinsurers,” he told insuranceNEWS.com.au. “I’ve just come back from [the annual Reinsurance Rendezvous in] Monte Carlo.”