Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Re — Investor Day (June 2006)
10 slides from Hannover Rueck's investor day presentation, Jun 23, 2006
Slide 1: Outlook
Outlook Wilhelm Zeller Chairman of the Executive Board 9th International Investors' Day ® London, 23 June 2006 hannover re
Slide 2: Is the reinsurance model broken? Investors' concerns
55key key concerns concerns Outlook IS THE REINSURANCE MODEL BROKEN? Investors' concerns Æ Reinsurers are not getting payback anymore (because the relationship business model has broken down) Æ There are limits to rate increases Æ Market entrance barriers are very low Æ New capital requirements by r
Slide 3: "Reinsurers are not getting payback anymore"
55key key concerns concerns Outlook "REINSURERS ARE NOT GETTING PAYBACK ANYMORE" Æ Good companies don't rely on payback after big losses • We aim to be one of the three most profitable reinsurers world-wide • We are committed to earn the cost of capital even in the softest of markets, in each year ¬
Slide 4: "There are limits to rate increases"
55key key concerns concerns Outlook "THERE ARE LIMITS TO RATE INCREASES" Æ The question is not • "last year's vs. this year's rate" (i.e. whether rates are going up or down), the question is • "are rates risk adequate?" After 7 years of consecutive rate increases (see HR's cycle thermometer), rates
Slide 5: "Market entrance barriers are very low"
55key key concerns concerns Outlook "MARKET ENTRANCE BARRIERS ARE VERY LOW" Æ Low barriers to entry = true only for (U.S. and London market) P/C reinsurance • BDA "Class of 2001" clearly had a dampening effect on short-tail rate development post WTC • BDA "Class of 2005" had no negative effect on ra
Slide 6: "New rating models = reinsurers even less profitable"
55key key concerns concerns Outlook "NEW RATING MODELS = REINSURERS EVEN LESS PROFITABLE" Æ Adequate returns might remain out of reach for the majority of companies. . . Æ . . .it will be different, however, for Hannover Re (= like in the past) • We will continue to substitute expensive equity capit
Slide 7: "There is always another bad surprise in the pipeline"
55key key concerns concerns Outlook "THERE IS ALWAYS ANOTHER BAD SURPRISE IN THE PIPELINE" Or: "The incredible ability of reinsurers to snatch defeat from the jaws of victory" Æ "Will good underwriting/investment results ever make it to the bottom line?" • HR management has identified underreserving
Slide 8: Guidance for 2006 remains unchanged
5 key concerns Outlook Outlook GUIDANCE FOR 2006 REMAINS UNCHANGED Gross written premium (calendar year) Æ Group + 0 - 5% • Property/Casualty R/I flat • Life/Health R/I + 12 - 15% • Financial R/I > 10% • Specialty Insurance + 0 – 5% Æ Group RoE* at least 15% Æ Dividend pay-out ratio 35 - 40% We expe
Slide 9: Financial calendar
5 key concerns Outlook Outlook FINANCIAL CALENDAR 7 February 2006 Conference Call on 2006 Renewals 23 March 2006 Press Conference on 2005 Annual Results 24 March 2006 Frankfurt/London Analysts' Meeting 12 May 2006 Annual General Meeting 12 May 2006 Interim Report 1/2006 23 June 2006 Investors' Day 8
Slide 10: We look forward to seeing you at the next Investors' Day
We look forward to seeing you at the next Investors' Day (June/July 2007)! ® hannover re