Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Rück — Corporate Update (February 2015)
36 slides from Hannover Rueck's corporate update, Feb 4, 2015
Slide 1: Property & Casualty Treaty Renewals 1 Jan 2015
1 Jan 2015 Property & Casualty Treaty Renewals Hannover, 4 February 2015
Slide 2: Important note
R/I markets Our approach Our portfolio Outlook Appendix Important note Unless otherwise stated, the renewals part of the presentation is based on Underwriting-Year (U/Y) figures. This basis is only remotely comparable with Financial-Year (FY) figures, which are the basis of quarterly and annual ac
Slide 3: Reinsurance markets
somewhat diyerent Reinsurance markets hannover re’
Slide 4: Competition continued to be intense
R/I markets markets Our approach Our portfolio Outlook Appendix Competition continued to be intense Reinsurance market highlights Market environment Following three years of good results and low NatCat loss burdens, the market remains very competitive As a result, further softening despite conti
Slide 5: Our approach
somewhat diyerent Our approach hannover re’
Slide 6: Overall successful 1 Jan renewals
R/I markets Our Our approach approach Our portfolio Outlook Appendix Overall successful 1 Jan renewals. . . . . .despite significant competitive pressure Our superior rating was a major factor to sustain our excellent market position Due to our active cycle management approach we reduced our cap
Slide 7: We maintained our competitive advantage on admin. expenses
R/I markets Our Our approach approach Our portfolio Outlook Appendix We maintained our competitive advantage on admin. expenses P&C administrative expense ratio* Financial year 3.2% 2.9% 2.8% 2.7% 2.5% 2009 2010 2011 2012 2013 Own calculation * Administrative expenses + other technical expenses (in
Slide 8: Time lag between U/W year and financial year
R/I markets Our Our approach approach Our portfolio Outlook Appendix Time lag between U/W year and financial year 2015 financial year reflects pricing quality for 2013, 2014 and 2015 underwriting year Premium distribution Financial years 2012 2013 2014 2015 2016 2017 10% 2015 40% 50% U/W years 10% 2
Slide 9: Our portfolio
somewhat diyerent Our portfolio hannover re’
Slide 10: 65% of treaty reinsurance renewed 1 January 2015
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix 65% of treaty reinsurance (R/I) renewed 1 January 2015 Equates to 49% of the total P&C premium Estimated premium income U/Y 2015 in m. EUR 8.000 Structured R/I and ILS 944 7.000 Facultative R/I 935 3,988 (65%) 6.000 6.000 Target 1
Slide 11: Renewals split in 2015
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix 65% of treaty reinsurance (R/I) renewed 1 January 2015 Renewals split in 2015 Traditional treaty reinsurance (excl. structured R/I & ILS and facultative R/I) in m. EUR Various Other countries Latin countries 6% Australasia 4% Amer
Slide 12: Premium development stable overall
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Premium development stable overall. . . . . .but varies by line of business Property & Casualty reinsurance 1/1/2014 1/1/2015 Lines of business Premium1) Variance Premium1) North America2) 657 +5% 692 Target markets 2) Continental
Slide 13: Price decreases but at a slower pace than last year
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Price decreases but at a slower pace than last year Realised price changes at a risk-adjusted level Non-proportional 1/1/2014 1/1/2015 Lines of business Of total premium1) Of total premium1) XL price changes North America2) 58% 55
Slide 14: Ongoing soft conditions
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Ongoing soft conditions Downward trend lost impetus Number of proportional treaties1) Number of non-proportional treaties2) 100% 100% 50% 50% 0% 0% -50% -50% -100% -100% 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% 06 07 08 09
Slide 15: Limited volume growth despite difficult market conditions
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Limited volume growth despite difficult market conditions Underwriting discipline still essential Change of Hannover Re shares: -0.8% Total treaty R/I Other changes (price & volume): +2.2% in m. EUR % on renewed: [100.0%] [-9.3%]
Slide 16: North America: Continued growth opportunities
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Continued growth opportunities North America in m. EUR Overall rates decreased, but at a slower pace than expected and at still acceptable margin levels in share: +1.3% in price & volume: +4.2% Favourable underlying market
Slide 17: Continental Europe: Volume kept stable
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Volume kept stable despite heterogeneous developments Excellent market position in Germany even extended Continental Europe in m. EUR Germany in share: -2.0% • Slightly positive premium development due to new client in price
Slide 18: Marine: Continued to be a major market leader
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Continued to be a major market leader for marine XL Rate reductions led to decrease in premium Marine in m. EUR Softening of rates as anticipated across all territories in share: -1.1% due to relatively few large losses in p
Slide 19: Aviation: Soft market prevails
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Soft market prevails in aviation despite large losses We are a recognised lead reinsurer Aviation in m. EUR Incurred large airline losses had hardly any impact on in share: -0.9% rates (in contraty to expectations) due to incr
Slide 20: Credit, surety and political risks: Stable market share
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Stable market share despite significant overcapacity Improved diversification within the line of business Credit, surety and pol. risks in m. EUR Continued good showing of business in share: -7.9% in price & volume: +5.2%
Slide 21: UK, London market & direct
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Business opportunities utilised in a competitive market UK, London market & direct in m. EUR UK motor XL rates flat to slightly higher in share: -0.7% after three consecutive years of strong rate increases in price & volume:
Slide 22: Worldwide treaty R/I: Slight increase in volume
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Slight increase in volume driven by emerging markets growth Large volume will be renewed later Worldwide treaty R/I in m. EUR Mature markets show flat to reduced volume in share: +3.5% development in price & volume: -1.8% 1,
Slide 23: Cat XL: Selective growth
R/I markets Our approach Our Our portfolio portfolio Outlook Appendix Selective growth Alternative capital accelerated rate reductions Cat XL in m. EUR Our excellent financial security is well recognised; in share: +1.7% limited further premium decrease from competitive in price & volume: -0.9
Slide 24: Outlook
Outlook Financial-year figures
Slide 25: Selective growth and satisfying profitability expected
R/I markets Our approach Our portfolio Outlook Outlook Appendix Selective growth and satisfying profitability expected Development of Property & Casualty R/I lines of business (FY 2015) Lines of business Volume1) Profitability2) Target North America3) + markets Continental Europe 3) +/- Marine + Avi
Slide 26: Guidance for 2015
R/I markets Our approach Our portfolio Outlook Outlook Appendix Guidance for 2015 Hannover Re Group Gross written premium1) flat to low single-digit growth rate Return on investment2) 3) ~ 3.0% Group net income2) ~ EUR 875 m. Dividend pay-out ratio4) 35% - 40% 1) At unchanged f/x rates 2) Su
Slide 27: Rationale for the 2015 profit guidance
R/I markets Our approach Our portfolio Outlook Outlook Appendix Rationale for the 2015 profit guidance Long-term success in a competitive business We expect increased profits from our Life & Health business Further strengthening of the confidence level of our P&C reserves may be limited due to IFRS
Slide 28: Disclaimer
R/I markets Our approach Our portfolio Outlook Appendix Disclaimer This presentation does not address the investment objectives or financial situation of any particular person or legal entity. Investors should seek independent professional advice and perform their own analysis regarding the appropri
Slide 29: Appendix
somewhat diyerent Appendix hannover re’
Slide 30: Selective underwriting led to growth in various lines
R/I markets Our approach Our portfolio Outlook Appendix Appendix Selective underwriting led to growth in various lines Change of Hannover Re shares: -1.1% Treaty R/I - proportional Other changes (price & volume): +3.4% in m. EUR % on renewed: [100.0%] [-8.3%] [91.6%] [2.3%] [8.1%] [102.0%] 4.200 62
Slide 31: Volume decrease in line with rate development
R/I markets Our approach Our portfolio Outlook Appendix Appendix Volume decrease in line with rate development Change of Hannover Re shares: 0.0% Treaty R/I - non-proportional Change in price: -2.8% in m. EUR Change in volume: 2.4% 2.400 % on renewed: [100.0%] [-11.4%] [88.6%] [-0.4%] [10.2%] [98.0%
Slide 32: Softening in Europe more pronounced in non-prop. business
R/I markets Our approach Our portfolio Outlook Appendix Appendix Softening in Europe more pronounced in non-prop. business Continental Europe Number of proportional treaties1) Number of non-proportional treaties2) 100% 100% 50% 50% 0% 0% -50% -50% -100% -100% 06 07 08 09 10 11 12 13 14 15 06 07 08 0
Slide 33: Further rate deterioration in most treaties
R/I markets Our approach Our portfolio Outlook Appendix Appendix Further rate deterioration in most treaties Marine Number of non-proportional treaties Comparison of Rate on Line (RoL) 100% 100% 80% 50% 60% 0% 40% -50% 20% -100% 0% 06 07 08 09 10 11 12 13 14 15 06 07 08 09 10 11 12 13 14 15 Net chan
Slide 34: Further rate deterioration
R/I markets Our approach Our portfolio Outlook Appendix Appendix Further rate deterioration Aviation RoL index in % 140 13.1 12.5 120 100 9.5 80 7.5 7.5 7.0 6.5 6.5 6.3 5.8 6.1 5.8 5.6 5.4 60 5.0 4.6 4.7 4.1 4.2 3.7 40 3.1 2.5 2.3 20 0 Assessment of market developments derived from the Hannover Re A
Slide 35: Proportional business holds up comparatively better
R/I markets Our approach Our portfolio Outlook Appendix Appendix Proportional business holds up comparatively better Worldwide treaty R/I Number of proportional treaties1) Number of non-proportional treaties2) 100% 100% 50% 50% 0% 0% -50% -50% -100% -100% 06 07 08 09 10 11 12 13 14 15 06 07 08 09 10
Slide 36: RoL deterioration seems to be losing momentum
R/I markets Our approach Our portfolio Outlook Appendix Appendix RoL deterioration seems to be losing momentum Number of Cat XL treaties Comparison of Rate on Line (RoL) 100% 100% 80% 50% 60% 0% 40% -50% 20% -100% 0% 06 07 08 09 10 11 12 13 14 15 06 07 08 09 10 11 12 13 14 15 Net change (improvement