Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Re — Q3 2005 Earnings Presentation
20 slides from Hannover Rueck's earnings presentation, Nov 10, 2005
Slide 1: Conference Call on Interim Report 3/2005
Conference Call on Interim Report 3/2005 0 ® Hannover, 10 November 2005 hannover re
Slide 2: Q3/2005 Group highlights
Highlights Key figures Targets Outlook Q3/2005 GROUP Æ Results heavily impacted by KatRita . . . . . . cat. losses way above multi-year average 30.7%* . . . but still positive YTD result ¬ The good news: We didn't lose any capital: Equity still growing Æ Premium growth continues • Gross premiums wri
Slide 3: Q3/2005 Business groups highlights
Highlights Key figures Targets Outlook Q3/2005 BUSINESS GROUPS Æ Property/Cas. R/I • GWP/NPE grow substantially +10.8%/+13.8% • Net income positive despite unprecedented cat. losses • Combined ratio YTD 113.4% − thereof large losses 30.7% Æ Life/Health R/I • Continued good GWP/NPE growth +17.3%/+20.
Slide 4: Transition to International Financial Reporting
Highlights Key figures Targets Outlook TRANSITION TO INTERNATIONAL FINANCIAL REPORTING Good comparability with Q3/2004 figures (US GAAP) is ensured Æ Main differences are: • Minority interests in earnings are calculated identically, but reported as earnings allocation, and thus shown "below the line
Slide 5: Group
Highlights Key figures Targets Outlook GROUP 1) 2) 2004 2005 in m. € Q1-3 1H Q3 YTD Variance Gross written premiums 7,179 4,831 2,505 7,336 +2.2% Net premiums earned 5,438 3,675 1,923 5,597 +2.9% Net underwriting result (245) (88) (581) (669) +173.2% - Net underwriting result incl. funds withheld 27
Slide 6: Property/Casualty R/I
Highlights Key figures Targets Outlook PROPERTY/CASUALTY R/I 1) 2) 2004 2005 in m. € Q1-3 1H Q3 YTD Variance Gross written premiums 3,295 2,424 1,226 3,650 +10.8% Net premiums earned 2,483 1,841 984 2,825 +13.8% Net underwriting result 82 61 (429) (368) -548.6% Net investment income 296 227 158 386
Slide 7: 2005 Catastrophe Losses
Highlights Key figures Targets Outlook Property/Casualty R/I 1) 2005 CATASTROPHE LOSSES Significantly above the long-term average of 5% to 6% in m. € 1,775 1,586 867 800 700 665 600 497 500 472 449 400 370 341 287 300 240 225 175 174 170 164 200 105 102 95 103 175 149 83 69 126 60 100 62 60 28 16 0
Slide 8: 2005 Catastrophe Losses
Highlights Key figures Targets Outlook 2005 CATASTROPHE LOSSES 1) in m. € Property/Casualty R/I Specialty Insurance Catastrophe loss/Date Gross Net Gross Net Winterstorm Erwin/Gudrun 7 - 9 Jan 40.4 32.1 - - Taifun Haitang 18 Jul 5.0 5.0 - - Flood India 26 Jul - 5 Aug 24.3 24.3 - - Flood Southern Eur
Slide 9: Loss Details on Katrina and Rita
Highlights Key figures Targets Outlook LOSS* DETAILS ON KATRINA AND RITA Katrina Rita in m. € Property 873.3 63.5 Marine 243.9 136.4 Total 1,117.2 199.9 Paid 9.9 - Advised case reserves 317.9 - Case IBNR 789.4 199.9 Total 1,117.2 199.9 Due to uncertainty EUR 200 m. additional IBNR for marine ® * P/C
Slide 10: Life/Health R/I
Highlights Key figures Targets Outlook LIFE/HEALTH R/I 1) 2) 2004 2005 in m. € Q1-3 1H Q3 YTD Variance Gross written premiums 1,497 1,131 624 1,755 +17.3% Net premiums earned 1,373 1,053 602 1,655 +20.6% Net underwriting result (90) (75) (53) (128) +42.6% - Net underwriting result incl. funds withhe
Slide 11: Financial R/I
Highlights Key figures Targets Outlook FINANCIAL R/I 1) 2) 2004 2005 in m. € Q1-3 1H Q3 YTD Variance Gross written premiums 884 510 178 688 -22.3% Net premiums earned 798 375 190 565 -29.2% Net underwriting result (142) (82) (50) (132) -7.4% - Net underwriting result incl. funds withheld 33 10 (15)
Slide 12: Specialty Insurance
Highlights Key figures Targets Outlook SPECIALTY INSURANCE 1) 2) 2004 2005 in m. € Q1-3 1H Q3 YTD Variance Gross written premiums 1,608 821 515 1,336 -16.9% Net premiums earned 784 413 152 565 -27.9% Net underwriting result (102) 8 (56) (48) -52.8% Net investment income 40 18 17 35 -11.7% - From ass
Slide 13: Investment Income
Highlights Key figures Targets Outlook INVESTMENT INCOME 1) 2) 2004 2005 in m. € Q1-3 Q1-3 Variance Ordinary investment income 721 734 +1.8% - From assets under own management 450 481 +7.0% - From funds withheld 271 253 -7.0% Realized gains/losses 94 138 +46.0% Impairments -23 (11) -50.0% Unrealized
Slide 14: R/I Recoverables: Low Default Risk
Highlights Key figures Targets Outlook R/I Recoverables LOW DEFAULT RISK More than 40% of recoverables are collateralized 30 Sep 2005 2004 P/C R/I L/H R/I Fin R/I Specialty Total in m. € Recoverables 4,173 2,369 174 200 2,355 5,098 Collateralized (incl. funds withheld, LOCs 1,907 954 174 200 778 2,1
Slide 15: All Strategic Business Groups: At a glance
Highlights Key figures Targets Outlook ALL STRATEGIC BUSINESS GROUPS At a glance Property/Casualty Life/Health Financial Specialty Consolidation Total R/I R/I R/I Insurance in m. € Q1-3/041) Q1-3/052) Q1-3/041) Q1-3/052) Q1-3/041) Q1-3/052) Q1-3/041) Q1-3/052) Q1-3/041) Q1-3/052) Q1-3/041) Q1-3/052)
Slide 16: Target Matrix
Highlights Key figures Targets Outlook TARGET MATRIX 2005 Historical data Business Group Key figures Target Q1-3 2004 2003 2002 Property/Casualty R/I Gross-premium growth none 10.8% (14.4%) (20.5%) 21.9% 1) Combined ratio - assuming a ≤ 100% 113.0% 97.0% 96.0% 96.3% net cat-loss ratio (natural & man
Slide 17: Outlook for 2005
Outlook for 2005 ® hannover re
Slide 18: Guidance for 2005
Highlights Key figures Targets Outlook GUIDANCE* FOR 2005 "KatRilma" changed guidance for P/C and the Group overall Æ Property/Casualty R/I: • "Wilma" ~ € 150 m. net pre tax • "Wilma" will erode Q4 profits Æ Life/Health R/I: • (Significant) double-digit premium & earnings growth Æ Financial R/I: • L
Slide 19: Outlook on 1/1 Renewals
Highlights Key figures Targets Outlook OUTLOOK ON 1/1 RENEWALS Æ Models proved unreliable Æ further safety margins needed: • Primaries to seek more coverage • Reinsurers with less capacity Severe market distortion • Rating agencies: Increasing capital requirements • Retro markets: Availability? Pric
Slide 20: Outlook on 1/1 Renewals (cont'd)
Highlights Key figures Targets Outlook OUTLOOK ON 1/1 RENEWALS (CONT'D) Æ HR will have sufficient capacity: • Capital base unimpaired at least • New securitization in progress Æ Why off-balance sheet capital? • Equity is by far the most expensive and least flexible • Securitization affords us flexib