Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Re — FY2012 Earnings Presentation
37 slides from Hannover Rueck's earnings presentation, Mar 8, 2013
Slide 1: Welcome to Hannover Re's Analysts' Conference
Welcome to Hannover Re's Analysts' Conference Frankfurt/London, 8 March 2013
Slide 2: Record results and strong top line growth
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Record results and strong top line growth RoE and value creation targets significantly outperformed Favourable R/I-conditions for reinsurers 2012 results Non-life R/I: rates overall higher than compared
Slide 3: Continued strong growth of both business groups
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Continued strong growth of both business groups 2012: +13.9%; 5-year CAGR +10.8% Gross written premium in m. EUR 13,774 12,096 11,429 10,275 44% 45% 44% 8,121 44% 39% 56% 56% 55% 56% 61% 2008 2009 2010 201
Slide 4: Positive operating cash flow continues to support asset growth
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Positive operating cash flow continues to support asset growth AuM increased by 12.5% in 2012 and 60.9% within 5 years Operating cash flow in m. EUR Assets under own management (AuM) in m. EUR 31,874 28,34
Slide 5: Attractive RoI on a further increased asset base
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Attractive RoI on a further increased asset base Net income from assets under own management up by +24.4% Net investment income (NII) in m. EUR Ordinary investment income 4.3% grew significantly since 20
Slide 6: Capital base constantly increased
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Capital base constantly increased Shareholders' equity more than doubled in four years Policyholders’ surplus in m. EUR Policyholders' surplus grew by 22% 8,973 Shareholders' equity increased due to re
Slide 7: Record dividend payment: dividend yield of 5.1%
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Record dividend payment: dividend yield of 5.1% Payout ratio 2011 and 2012 over and above target range Dividend per share in EUR Payout ratio: [29%] [43%] [-] [37%] [38%] [-] [ 35% ] [37%] [42%] [42%] 3.00
Slide 8: Accelerated value since 2009
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Accelerated value since 2009 2012: +19.4% and 10y CAGR: +11.6% Increase book value and paid dividends in EUR 68.20 57.10 17.98 15.88 13.58 11.48 9.18 7.58 11.48 6.58 7.58 50.22 5.63 41.22 37.39 27.77 30.80
Slide 9: Strong top line growth coupled with record profits
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Strong top line growth coupled with record profits Mainly driven by improved underwriting result and investment income YTD 2012 Group figures in m. EUR Q4/2011 Q4/2012 2011 2012 Gross written premium 3,031
Slide 10: Attractive RoE despite strong equity growth
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Attractive RoE despite strong equity growth Strategic target again exceeded Return on Equity: yearly Return on Equity: average 22.4% 18.2% 15.6% 13.0% 13.7% 14.0% 12.8% 11.2% 11.1% 11.0% 10.6% 11.3% 11.8%
Slide 11: Hannover Re defends no. 1 position in ROE ranking
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Hannover Re defends no. 1 position in ROE ranking We aim to be one of the top 3 reinsurers in terms of RoE 2008 2009 2010 2011 2012 2008 - 2012 Company RoE Rank RoE Rank RoE Rank RoE Rank RoE Rank avg. RoE
Slide 12: Hannover Re further strengthened its cost leadership
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Hannover Re further strengthened its cost leadership Decreasing administrative expense ratio aided by top line growth Administrative expense ratio* 3.2% 3.2% 3.1% 2.8% 2.6% 2008 2009 2010 2011 2012 Own cal
Slide 13: Excellent results from our non-life business group
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Excellent results from our non-life business group Combined ratio of 95.8% below target C/R Non-life reinsurance in m. EUR Q4/2011 Q4/2012 2011 2012 YTD 2012 +13.1% GWP growth (f/x-adj. +9
Slide 14: Non-life reinsurance: selective growth
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Non-life reinsurance: selective growth GWP split 2012: EUR 7,717 m. GWP growth 2012 vs. 2011 (+13.1%) Global +246 North America +28.0% cat XL North Global 5% America facultative 15% Germany
Slide 15: Major losses 2012 below our expectation
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Major losses 2012 below our expectation Natural and man-made catastrophe losses1) in m. EUR 2,373 1,730 1,070 981 863 775 672 662 662 560 410 458 478 377 285 291 240 83 121 107 60 2003 2004
Slide 16: Hurricane "Sandy" dominates large loss list
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Hurricane "Sandy" dominates large loss list Catastrophe losses* in m. EUR Date Gross Net Earthquake Italy 20 May 44.2 44.1 Earthquake Italy 29 May 22.4 22.4 Draught USA July 56.5 43.3 Typhoo
Slide 17: Growth outperformed own target in life and health reinsurance
Group Non-life reinsurance Life Lifeand and health health reinsurance reinsurance Investments Outlook 2013 Appendix Growth outperformed own target in life and health reinsurance EBIT margin in line with expectation YTD 2012 Life and health R/I in m. EUR Q4/2011 Q4/2012 2011 2012 +14.9% GWP growth
Slide 18: Life and health reinsurance: well diversified portfolio
Group Non-life reinsurance Life Lifeand and health health reinsurance reinsurance Investments Outlook 2013 Appendix Life and health reinsurance: well diversified portfolio GWP split 2012: EUR 6,058 m. Growth GWP 2012 vs. 2011 (+14.9%) Financial +419 Morbidity Financial solutions +37.5% 13% solutions
Slide 19: RoI at 4.3% well exceeds target of 3.5%
Group Non-life reinsurance Life and health reinsurance Investments Investments Outlook 2013 Appendix RoI at 4.3% well exceeds target of 3.5% Strong increase in ordinary income; positive effect from (un)realised gains YTD 2012 in m. EUR Q4/2011 Q4/2012 2011 2012 RoI Increase of 13.4% in ordinary in
Slide 20: Ongoing reallocation into credits but slower at pace
Group Non-life reinsurance Life and health reinsurance Investments Investments Outlook 2013 Appendix Ongoing reallocation into credits but slower at pace Volume increase due to strong cash flow and increased market values Tactical asset allocation 1) Investment category 2008 2009 2010 2011 2012 Fixe
Slide 21: We have achieved our targets
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix We have achieved our targets Business group Key figures Strategic targets 2012 Group Return on investment 1) ≥3.5% 4.1 % Return on equity ≥10% 2) 15.6 % Earnings per share growth (y-o-y) ≥10% 41.6 %
Slide 22: Outlook 2013
somewhat diyerent Outlook 2013 hannover re’
Slide 23: Guidance for 2013
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2013 2013 Appendix Guidance for 2013 Hannover Re Group Gross written premium (GWP)1) ~ +5% • Non-life reinsurance1) ~ +3% - +5% • Life and health reinsurance1)2) ~ +5% - +7% Return on investment3)4) ~ 3.4% Group
Slide 24: Selective growth and satisfying profitability expected
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2013 2013 Appendix Selective growth and satisfying profitability expected Development of non-life reinsurance lines of business (2013e) Lines of business Volume1) Profitability2) Target North America3) + markets Germa
Slide 25: Life and health R/I should continue its success story in 2013
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2013 2013 Appendix Life and health R/I should continue its success story in 2013 Development of lines of business Lines of business Volume1) Profitability2) Financial Financial Solutions + solutions Longevity + Risk s
Slide 26: Hannover Re sees further prosperity
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2013 2013 Appendix Hannover Re sees further prosperity Despite a challenging environment Group • Top rating (S&P: AA-; A.M. Best: A+) ensures attractive new business • Approved strategy: growing HR profitably • Gene
Slide 27: Appendix
somewhat diyerent Appendix hannover re’
Slide 28: Our strategic business groups at a glance
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Our strategic business groups at a glance 2012 vs. 2011 Non-life Life and health Total reinsurance reinsurance in m. EUR 2011 2012 2011 2012 2011 2012 Gross written premium 6,826 7,717 5,270 6,058 12,09
Slide 29: Our strategic business groups at a glance
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Our strategic business groups at a glance Q4/2012 vs. Q4/2011 Non-life Life and health Total reinsurance reinsurance in m. EUR Q4/2011 Q4/2012 Q4/2011 Q4/2012 Q4/2011 Q4/2012 Gross written premium 1.605
Slide 30: Well balanced international portfolio
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Well balanced international portfolio Gross written premium (Group) in m. EUR 11,343 9,567 9,317 9,289 8,259 8,121 10,275 11,429 12,096 13,774 4% Africa 3% 6% 6% Australia 20% 11% Latin America 16% 17%
Slide 31: Stress tests on assets under own management
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Stress tests on assets under own management Relaxed on Asset Liability Management view, but with largest risk on credits Change in market Changes in OCI ALM* net total Portfolio Scenario value before ta
Slide 32: Continuously reduced share of bank exposure reached our target
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Continuously reduced share of bank exposure reached our target Unchanged focus on conservative title selection Corporate allocation in m. EUR Total bank exposure EUR 2,841 m. 10,071 5% <BBB 8% Rest of 8
Slide 33: No material exposure in Southern Europe and Ireland
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix No material exposure in Southern Europe and Ireland* Merely 0.2% of total AuM; further reduction of exposure in Spain Asset allocation in m. EUR Spain Portugal 33 20 0.2% Ireland 8 Greece 0 Italy 19 Tot
Slide 34: Fixed-income book well balanced
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Fixed-income book well balanced Allocation according to our business diversification Pfandbriefe, Short-term Semi- Governments Corporates Covered Bonds, investments, Total governments ABS cash AAA 29.6%
Slide 35: Currency allocation matches liability profile of balance sheet
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Currency allocation matches liability profile of balance sheet Active asset liability management ensures durational match Currency in % Others CAD 6.5% Fixed income backing 2.2% AUD shareholders’ equi
Slide 36: Partial inflation hedge refreshed via inflation linkers
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 Appendix Appendix Partial inflation hedge refreshed via inflation linkers Sensitivities reset to initial levels as of 2010 Average hedged inflation level of 2.2% p.a. • 2012: P&L effect EUR 28.0 m.; OCI effect EUR 0.2
Slide 37: Disclaimer
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2013 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 ow