Hannover Rueck Se · XETR:HNR1
Hannover Rueck — Hannover Re — Q1 2014 Earnings Presentation
25 slides from Hannover Rueck's earnings presentation, May 7, 2014
Slide 1: Conference Call on Interim Report 1/2014
Conference Call on Interim Report 1/2014 Hannover, 7 May 2014
Slide 2: Good start to 2014
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Good start to 2014 RoE of 15.3% well in excess of strategic target Group Gross written premium: EUR 3,624 m. (-3.6%) GWP f/x-adjusted growth of -0.7% mainly due to Net premium earned: EUR 2,913 m. (-
Slide 3: Pleasing results supported by strong non-life U/W result
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Pleasing results supported by strong non-life U/W result Net investment income above expectations Group figures in m. EUR Q1/2013 Q1/2014 Δ YTD Gross written premium 3,758 3,624 -3.6% GWP f/x-adjusted gr
Slide 4: Shareholders' equity increased by 7%
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Shareholders' equity increased by 7% Financial leverage reduced due to EUR 750 m. subordinated bond redemption Policyholders' surplus in m. EUR Financial leverage development* 8,947 8,768 8,431 7,338 2,233
Slide 5: Continued positive cash flow
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Continued positive cash flow Stable AuM despite redemption of EUR 750 m. hybrid bond Operating cash flow in m. EUR Assets under own management (AuM) in m. EUR 31,874 31,875 31,739 2,637 2,523 28,341 493 2,
Slide 6: Excellent results
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Excellent results Underwriting and investment income contributed positively Non-life reinsurance in m. EUR Q1/2013 Q1/2014 Δ YTD Gross written premium 2,198 2,108 -4.1% GWP f/x-adjusted gr
Slide 7: Most lines outperform the MtCR
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Most lines outperform the MtCR Aviation hit by the Malaysian Airline loss Combined Ratio Q1/2014 vs. MtCR in % Target North America* 96.3% markets Germany* 80.6% Marine (incl. energy) 79.1%
Slide 8: Only one major loss reported in Q1/2014
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Only one major loss reported in Q1/2014 Natural and man-made catastrophe losses1) in m. EUR 2,373 1,730 1,070 981 863 775 724 672 662 662 578 670 410 458 478 377 285 291 240 121 107 51 31 20
Slide 9: Heading for a normalised result in 2014
Group Non-life reinsurance Life Lifeand and health health reinsurance reinsurance Investments Outlook 2014 Appendix Heading for a normalised result in 2014 Solid EBIT margin Life and health R/I in m. EUR Q1/2013 Q1/2014 Δ YTD GWP f/x-adjusted growth +0.7%, mainly from China and Gross written premi
Slide 10: Ordinary result in line with expectation
Group Non-life reinsurance Life and health reinsurance Investments Investments Outlook 2014 Appendix Ordinary result in line with expectation Realised gains mainly due to bond redemption and f/x-change of Bermudian entities in m. EUR Q1/2013 Q1/2014 RoI YTD Ordinary investment income* 247 244 3.1%
Slide 11: Target Matrix 2014
Group Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Target Matrix 2014 Most targets achieved Business group Key figures Strategic targets Q1/2014 Group Return on investment 1) ≥3.2% 3.4 % 2) Return on equity ≥9.6% 15.3% Earnings per share growth (y-o-y) ≥10
Slide 12: Outlook 2014
somewhat diyerent Outlook 2014 hannover re’
Slide 13: 5% decrease in premium reflects cycle management
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2014 2014 Appendix 5% decrease in premium reflects cycle management Non-life treaty renewals: 2 January 2014 - 1 April 2014 April renewals in m. EUR Volume reflects strict adherence to margin requirements in share
Slide 14: Guidance for 2014
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2014 2014 Appendix Guidance for 2014 Major loss budget of EUR 670 m. Hannover Re Group Gross written premium1) flat to low single-digit growth rate Return on investment2) ~ 3.2% Group net income3) ~ EUR 850 m.
Slide 15: Overall largely stable portfolio with continued good quality
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2014 2014 Appendix Overall largely stable portfolio with continued good quality Development of non-life reinsurance lines of business (FY 2014e) Lines of business Volume1) Profitability 2) Target North America3) + mar
Slide 16: Life and health R/I profitability back on track in 2014
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2014 2014 Appendix Life and health R/I profitability back on track in 2014 Positive contributions from all reporting categories Reporting categories Volume1) Profitability2) Financial Financial Solutions ++ Solutions
Slide 17: We are confident of achieving the 2014 profit guidance
Group Non-life reinsurance Life and health reinsurance Investments Outlook Outlook 2014 2014 Appendix We are confident of achieving the 2014 profit guidance Net income ~ EUR 850 m. We expect that our life and health result will improve significantly compared to 2013 Further strengthening of the conf
Slide 18: Appendix
somewhat diyerent Appendix hannover re’
Slide 19: Our strategic business groups at a glance
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Appendix Our strategic business groups at a glance Q1/2014 vs. Q1/2013 Non-life Life and health Total reinsurance reinsurance in m. EUR Q1/2013 Q1/2014 Q1/2013 Q1/2014 Q1/2013 Q1/2014 Gross written premium 2,198
Slide 20: Asset allocation largely unchanged
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Appendix Asset allocation largely unchanged Assets under management volume stable despite bond redemption in February Tactical asset allocation 1) Investment category 2010 2011 2012 2013 Q1/2014 Fixed-income sec
Slide 21: Stress tests on assets under own management
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Appendix Stress tests on assets under own management Unchanged focus on the credit portfolio Change in Changes in Portfolio Scenario market value OCI before tax in m. EUR in m. EUR -10% -3 -3 Equity prices -20%
Slide 22: Fixed-income book well balanced
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Appendix Fixed-income book well balanced Allocation reflects reinsurance liabilities Pfandbriefe, Short-term Semi- Governments Corporates Covered Bonds, investments, Total governments ABS cash AAA 18.5% 49.5% 1.
Slide 23: Currency allocation matches liability profile of balance sheet
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Appendix Currency allocation matches liability profile of balance sheet Active asset liability management ensures durational match to a large extent Currency split of investments Modified duration of fixed Oth
Slide 24: Market sensitivity of inflation hedges
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 Appendix Appendix Market sensitivity of inflation hedges Roll down of discount effects on a rather stable curve of expectations Average hedged inflation level of 2.03% (EUR) and 2.46% (USD) p.a. • P&L effect YTD EUR -1
Slide 25: Disclaimer
Group Non-life reinsurance Life and health reinsurance Investments Outlook 2014 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