Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Rück — Investor Presentation (June 2022)
95 slides from Hannover Rueck's investor presentation, June 2022
Slide 1: Hannover Re: the somewhat different reinsurer
Hannover Re: the somewhat different reinsurer June 2022
Slide 2: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 2 Hannover Re: the somewhat different reinsurer
Slide 3: Key facts about Hannover Re
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Key facts about Hannover Re 1966 3rd Founded Largest reinsurer by HDI (P&C in the world reinsurance only) 1990 2021: Start of L&H >3,000 reinsurance as strategic Total staff of growth segment employees 1994 HR share 2021: >170 Initial Public 2004 2013
Slide 4: Growth and international expansion mainly organically driven
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Growth and international expansion mainly organically driven M&A activity not accompanied by high integration cost and complexity Hamburger Internationale RV (L&H incl. US) E+S Rück (Germany) Skandia (portfolios, incl. L&H UK, Hollandia South P&C facul
Slide 5: Group structure supports our business model
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Group structure supports our business model Free float Talanx AG1) 49.8% 50.2% 64.8% 8 German >170 subsidiaries, primary insurers branch/rep. 35.1% offices worldwide Domestic business International business 1) Majority shareholder HDI V.a.G. 5 Hannover
Slide 6: Executive Board of Hannover Rück SE
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Executive Board of Hannover Rück SE Chief Executive Officer Chief Financial Officer Property & Casualty R/I Life & Health R/I Jean-Jacques Henchoz Clemens Jungsthöfel Dr. Michael Pickel Sven Althoff Silke Sehm Claude Chèvre Dr. Klaus Miller Group Opera
Slide 7: We are among the top reinsurers in the world
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | We are among the top reinsurers in the world Premium ranking 2020 in m. USD Rank Group Country GWP NPW 1 Munich Re DE 45,846 43,096 2 Swiss Re CH 36,579 34,293 3 Hannover Re1) DE 30,421 26,232 4 SCOR FR 20,106 17,910 5 Berkshire Hathaway Inc. US 19,195
Slide 8: Reinsurance has the character of a specialty market
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Reinsurance has the character of a specialty market With a share of 7% of the overall insurance market Market size primary insurance vs. reinsurance Global insurance premium ~ EUR 4 trillion Global reinsurance premium ~ EUR 281 billion 2020 or latest.
Slide 9: Growing Property and Casualty reinsurance market
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Growing Property and Casualty reinsurance market Hannover Re outperforms the market Market size and concentration 2020 in bn. EUR Market share 2020 Hannover Re Top 10 Other Top 10 • Low market entry 64 % 187 barriers lead to high 175 Other fragmentatio
Slide 10: Life and Health reinsurance in a global perspective
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Life and Health reinsurance in a global perspective Concentrated market due to high entry barriers Market size and concentration 2020 in bn. EUR Market share 2020 Hannover Re Top 7 Other Other 17% Top 7 • High market entry 83% 94 barriers lead to a hig
Slide 11: Reinsurance industry returns highlight need for pricing improvements
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Reinsurance industry returns in recent years highlight the need for further improvements in reinsurance pricing Development of return on equity and Guy Carpenter Global Property Cat RoL Index 237% 233% 229% 350 225% 221% 217% 213% 209% 205% 201% 197% 1
Slide 12: Reinsurance is and will be an attractive product
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Reinsurance is and will be an attractive product Drivers for reinsurance demand Drivers Impact on insurance Value proposition R/I Global trends • Increasing demand for • Strong capital base • Value concentration insurance of non-diversifying • Diversif
Slide 13: Favourable premium growth accelerates in last years
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Favourable premium growth accelerates in last 4 years 10-year CAGR: +8.7% Gross written premium in m. EUR 27,762 24,770 22,598 31% 19,176 32% 17,791 17,069 16,354 35% 13,774 13,963 14,362 38% 40% 45% 44% 44% 44% 45% 69% 68% 65% 60% 62% 56% 55% 55% 56%
Slide 14: Well-balanced international portfolio growth
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Well-balanced international portfolio growth Gross written premium in m. EUR Africa 27,762 2.2 % Australia 24,770 6.7 % 4.3% 4.1 % 22,598 Latin America 16.1 % 19,176 17,791 Asia 17,069 16,354 15.4 % 15.5% 13,774 13,963 14,362 Other European Countries 3
Slide 15: Strong earnings track record
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Strong earnings track record 2021: strong results despite high large losses and Covid-19 impact in L&H Operating profit (EBIT) in m. EUR 1,755 1,853 1,689 1,735 1,597 1,394 1,466 1,364 1,229 1,214 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Earni
Slide 16: Stronger emphasis on continuity of ordinary dividend distribution
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Stronger emphasis on continuity of ordinary dividend distribution Continued use of special dividend for efficient and flexible capital management Dividend per share in EUR Dividend strategy changed in 2021 63% 60% 61% Ordinary DPS ≥ prior year 56% 52%
Slide 17: RoE of 10.8% well above target for 2021
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | RoE of 10.8% well above target for 2021 5Y-average RoE of 11.1% is highly satisfactory despite exceptional loss burden Return on Equity: yearly Return on Equity: average 11,440 10,762 9,652 8,763 8,653 13.3% 13.4% 12.9% 12.2% 11.1% 2.5% 10.9% 4.0% 10.8
Slide 18: Hannover Re is one of the most profitable reinsurers
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Hannover Re is one of the most profitable reinsurers No. 1 position on 5-year average RoE - significantly above peer average 2017 2018 2019 2020 2021 2017 - 2021 Company RoE Rank RoE Rank RoE Rank RoE Rank RoE Rank avg. RoE Rank Hannover Re 10.9% 2 12.
Slide 19: Continuous increase of value creation
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Continuous increase of value creation 10-year CAGR: +10.6% Book value and accumulated paid dividends in EUR 156.78 58.23 53.73 48.23 32.98 42.98 37.98 28.23 23.98 17.98 20.98 98.55 87.30 91.17 74.61 70.72 72.78 62.61 66.90 50.22 48.83 2012 2013 2014 20
Slide 20: Shareholders' equity up by 8.1%
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Shareholders' equity up by 8.1% Policyholders’ surplus increased by 46% since 2017 Policyholders' surplus in m. EUR Change in shareholders' equity in m. EUR 15,734 14,071 13,589 2,977 2,232 1,231 11,885 2,234 871 709 11,035 10,995 10,779 844 826 (543)
Slide 21: Low expense ratio is an important competitive advantage
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Low expense ratio is an important competitive advantage Administrative expense ratio Expense ratio (P&C reinsurance) 5-year average 32.8% 31.0% 31.1% 28.9% 5.5% 5.6% 5.6% 4.8% 5.0% 2.9% 2.9% 2.6% 2.4% 2.4% 2.2% 2.1% 2017 2018 2019 2020 2021 Peer 1 Peer
Slide 22: Purpose & Values
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Purpose & Values The “why” and the “how” articulate our distinctive corporate culture Our self-conception Our values Purpose Why do we do what we do? We are ambitious - We are open-minded for our clients’ success and give things a try Core values Beyon
Slide 23: Our competitive strengths lie in our corporate culture and operating model
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Our competitive strengths lie in our corporate culture and operating model and lead to higher profitability with lower volatility Focus on client loyalty and Lean operating partnerships model and cost leadership Strong Effective underwriting capital di
Slide 24: Striving for sustainable outperformance
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Striving for sustainable outperformance Group strategy 2021 - 2023 Performance drivers Beyond risk sharing – Performance enablers we team up to create opportunities Preferred Responsibility Drive business partner Empowered people We-spirit Earnings gro
Slide 25: Target Matrix
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Target Matrix Strategy cycle 2021 - 2023 Business group Key figures Strategic targets Group Return on equity 1) 900 bps above risk-free Solvency ratio2) ≥ 200% Property & Casualty reinsurance Gross premium growth3) ≥ 5% EBIT growth4) ≥ 5% Combined rati
Slide 26: Sustainability at Hannover Re: How we evolved
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Sustainability at Hannover Re How we evolved • Publication of first sustainability • Listed in • Listed in Global • Phased exit for any coal • Signature of UN PSI strategy FTSE4Good-Index Challenges index based risks until 2038 • Human rights policy st
Slide 27: Sustainability Strategy 2021 - 2023 – Overview
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Sustainability at Hannover Re Sustainability Strategy 2021 - 2023 – Overview • In summer 2020, we teamed up to develop our new Sustainability Strategy 2021 - 2023 • The sustainability strategy serves our purpose and values • It is closely related to th
Slide 28: Sustainability Strategy 2021 - 2023 – Action fields
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Sustainability at Hannover Re Sustainability Strategy 2021 - 2023 – Action fields encompass our material topics Transparency encompasses voluntary commitments and fundamental issues Motivated and well-trained employees are a crucial with implications f
Slide 29: Net zero targets
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Net zero targets Comprehensive goal setting in core business and own business operations Net zero Net zero Net zero by 2050 by 2050 by 2030 Asset Management Underwriting Own business operations • Climate strategy: • Exit from all risks connected with t
Slide 30: Present on all continents
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Present on all continents Europe Madrid Dublin London Paris Hannover Milan Stockholm The Americas Asia Manama Toronto Seoul Charlotte Chicago Tokyo Denver New York Orlando Taipei Hamilton Shanghai Hong Kong Mexico City Mumbai Bogotá Africa Australia Ku
Slide 31: HR share price performance over a 3-year rolling period
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | HR share price performance over a 3-year rolling period Performance comparison (incl. reinvested dividends) 180 % +63% 160 % +58% +56% 140 % +50% 120 % +23% 100 % 80 % -21% 60 % 40 % Hannover Re DAX MDAX Munich Re Swiss Re Scor 31 Hannover Re: the some
Slide 32: Yearly Total Shareholder Return (TSR) of 12.6%
| 1 Hannover Re Group | 2 | 3 | 4 | 5 | 6 | 7 | Yearly Total Shareholder Return (TSR) of 12.6% Value creation since IPO in m. EUR 2020 2021 Market capitalisation as of date 15,714 20,158 - Market capitalisation at IPO 1,084 1,084 (Nov 1994) +2,374% + Dividend payments (cumulative) 6,780 7,473 - Capi
Slide 33: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 33 Hannover Re: the somewhat different reinsurer
Slide 34: We are somewhat different
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | We are somewhat different Distribution Central U/W Distribution channels Property & Casualty reinsurance Central underwriting • Flexible cost base due to with local talent is key to relatively higher share of our success business written
Slide 35: Property & Casualty: Strategy
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Property & Casualty: Strategy Preferred Further expand our bottom line through existing and Continue to build out our position as innovation partner Innovation business new client relationships for our clients and position accordingly tow
Slide 36: Property & Casualty reinsurance: strong and diversified growth
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Property & Casualty reinsurance: strong and diversified growth 5-year CAGR: +15.9% GWP split by reporting categories in m. EUR Gross written premium split by regions Agricultural Risks 19,224 Latin Africa 3% Australia America 3% 2% 4% 4%
Slide 37: Around 2/3 of our business is written via brokers
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Around 2/3 of our business is written via brokers ~1/3 of our business is non-proportional Breakdown of treaties by volume (in % and m. EUR) GWP by segment 19,224 16,744 14,781 30% Other 11,976 30% 12.0% 12,0 % 10,711 29% 32% 33% 70% 70%
Slide 38: Margin-oriented U/W approach leads to profitable growth
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Margin-oriented U/W approach leads to profitable growth 2021: strong premium growth – large losses exceed budget by 150 m. Gross written premium in m. EUR EBIT/EBIT margin in m. EUR 19,224 12.2% 12.2% 5y CAGR: 10.0% 9.1% 15.9% 16,744 5.8%
Slide 39: Target Combined Ratio varies substantially by line of business
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Target Combined Ratio varies substantially by line of business Targets for FY 2022 NPE + Economic revaluation - Capital margin = Target Combined Ratio Net premium earned (100%) Discount effect on P&C net loss reserves Capital margin above
Slide 40: Reserve redundancies increased by EUR 167 m. in 2021
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Reserve redundancies increased by EUR 167 m. in 2021 Level of additional IBNR is 50% of total reserves in m. EUR Year end 1) Redundancy 2) Increase redundancy Effect on loss ratio P&C premium (net earned) 2010 956 89 1.6% 5,394 2011 1,117
Slide 41: The risk is manageable: stress tests for natural catastrophes
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | The risk is manageable Stress tests for natural catastrophes after retrocessions Effect on forecast net income in m. EUR 2020 2021 100-year loss (1,107) (1,452) Hurricane US/Carribean 250-year loss (1,594) (1,959) 100-year loss (554) (839
Slide 42: Previous years confirm our reliable planning of NatCat budget
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Previous years confirm our reliable planning of NatCat budget NatCat losses vs. budget in % of NPE average NatCat 20% losses vs. Volatility1) budget 15% -0.1% 3.9% 10% 5% Peers 3.2% 7.6% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 43: 62% of traditional treaty reinsurance up for renewal at 1 January 2022
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 62% of traditional treaty reinsurance up for renewal at 1 January 2022 Equates to 43% of the total P&C inforce premium Estimated premium income U/Y by reporting lines 19,425 Structured reinsurance and ILS 4,538 Facultative reinsurance 1,0
Slide 44: 38% of traditional treaty reinsurance comes up for renewal later
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 38% of traditional treaty reinsurance comes up for renewal later in a favourable market environment Estimated premium income U/Y by regions 12,694 230 223 9% Remaining renewals 4,886 292 1,060 19% 2 Apr - 1 Jul renewals 2,499 10% 2 Jan -
Slide 45: Risk-adjusted price increase of 4.1% supported growth
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Risk-adjusted price increase of 4.1% supported growth in most regions and lines of business Traditional treaty reinsurance Reporting lines Premium 1/1/2021 Premium 1/1/2022 Premium changes Price changes EMEA1) 3,380 3,712 +9.8% +5.3% Amer
Slide 46: Satisfactory renewal in both treaty types
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | Satisfactory renewal in both treaty types 6.1% risk-adjusted rate increase in non-proportional business Proportional Non-proportional Premium Premium Premium Premium Reporting lines Price changes Price changes 1/1/2022 changes 1/1/2022 ch
Slide 47: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 47 Hannover Re: the somewhat different reinsurer
Slide 48: We are somewhat different
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | We are somewhat different Undogmatic Responsive We have an undogmatic Life & Health reinsurance We are committed to time to approach market & responsiveness • Strong entrepreneurial spirit • Rapid decision-making processes • Appetite to innovat
Slide 49: Life & Health: Strategy
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Life & Health: Strategy Preferred Support our clients in optimising consumer Innovation Provide our clients with tailored risk-transfer business experience and risk segmentation solutions beyond our core expertise catalyst partner • Deepen data
Slide 50: Life & Health reinsurance: diversified growth in line with strategic target
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Life & Health reinsurance: diversified growth in line with strategic target 5-year CAGR: +3.6% GWP split by reporting categories in m. EUR Gross written premium split by regions Africa 8,538 Latin Germany 8,026 3% 3% 7,816 America North 5% 7,20
Slide 51: Favourable premium growth
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Favourable premium growth 2021: result impacted by Covid-19 losses – strong earnings in Financial Solutions Gross written premium in m. EUR EBIT/EBIT margin in m. EUR 8.2% 5y CAGR: 3.6% 570 5.5% 8,538 7,815 8,026 4.3% 7,081 7,200 3.8% 3.0% 393
Slide 52: Value of New Business well above target
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Value of New Business well above target Mainly driven by Financial Solutions and Longevity business Value of New Business development in m. EUR 893 778 663 543 448 364 326 Target 2021 290 ≥ EUR 250 m. 1) 2) 2) 2) 2) 2) 2) 2014 1) 2015 2016 2017
Slide 53: Writing attractive traditional life & health business
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Writing attractive traditional life & health business Whilst positioning ourselves for sustainable growth with a clear strategic focus Risk Solutions Financial Solutions Reinsurance Services Provide terms and capacity Achieve financial objectiv
Slide 54: Clients served by our network of offices and expert networks
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Our clients are served in the markets by our network of offices and by our solution-orientated expert networks Automated Biometric U/W systems research L&H Expert networks Longevity Financial solutions solutions R&D Health (re-) technology insu
Slide 55: Complete offerings
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Complete offerings Risk and financial solutions & services Risk Solutions Financial Solutions Reinsurance Services Competitive terms and appropriate Structured agreements to achieve Comprehensive range geared capacity for technical risks certai
Slide 56: Example risk solution: mortality & longevity
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Example risk solution: mortality & longevity Risks Trigger Mortality Life expectancy Life expectancy Risk of paying more death benefits than expected Mortality Mortality Risk Longevity Risk of paying annuities longer than expected LongevityLong
Slide 57: Example risk solution: morbidity - critical illness
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Example risk solution: morbidity - critical illness Morbidity Product: Critical illness insurance Risk of experiencing a higher claims burden from traditional Helps consumers to protect their life quality health, critical illness, long-term car
Slide 58: Example: services offered with risk and/or financial solutions
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Example: services offered with risk and/or financial solutions Products Innovative, e.g. products with little or no underwriting Processes Lean, e.g. distribution directly to individuals, without advisers Biometrics Cover of death, disease or d
Slide 59: Primary differences between L&H and P&C business
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Primary differences between L&H and P&C business Simplified illustration Accounting considerations (premium) Single Recurring IBNR reserve impact Low High Involvement of brokers Low High Number of competitors Few Many Number of reinsurer partic
Slide 60: Takeaways for the Life & Health Business Group
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | Takeaways for the Life & Health Business Group Business Service 1 All lines of life, health & annuities 4 An important component Focus Premium 2 Biometric risks not asset risk 5 Not the only meaningful benchmark EBIT Relationship Financial so
Slide 61: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 61 Hannover Re: the somewhat different reinsurer
Slide 62: Strong operating cash flow driven by profitable premium growth
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | Strong operating cash flow driven by profitable premium growth AuM stable despite negative valuation effect of rising interest rates Operating cash flow in m. EUR Assets under own management (AuM) in m. EUR 4,940 56,213 56,245 747 49,002 47,629 42,
Slide 63: Good net investment income in a volatile market environment
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | Good net investment income in a volatile market environment Assets under own management stable at EUR 56 bn. Total investments in m. EUR Investment income in m. EUR 67,520 68,021 1,943 58,960 11,306 11,776 58,903 1,757 1,686 268 53,062 11,274 9,958
Slide 64: Ordinary income with increased return from government bonds
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | Ordinary income with increased return from government bonds Stable asset allocation, more defensive credit-risk taking Asset allocation1) Ordinary income split Investment category 2018 2019 2020 2021 Q1/2022 Short-term Fixed-income securities 87% 8
Slide 65: High-quality fixed-income book well balanced
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | High-quality fixed-income book well balanced Geographical allocation mainly in accordance with our broad business diversification Pfandbriefe, Short-term Semi- Governments Corporates Covered bonds, investments, Total governments ABS cash AAA 74% 54
Slide 66: Currency allocation matches modelled liability profile
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | Currency allocation matches modelled liability profile Strict duration-neutral strategy continued Currency split of investments Others 11% • Modified duration of fixed-income mainly congruent with CAD EUR 3% 29% liability- and capital-driven target
Slide 67: Stress tests on assets under own management
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | Stress tests on assets under own management Ongoing focus on credit exposures Change in market Change in OCI before Portfolio Scenario value tax in m. EUR in m. EUR -10% -221 -221 Equity (listed and private equity) -20% -443 -443 +50 bps -1,395 -1,
Slide 68: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 68 Hannover Re: the somewhat different reinsurer
Slide 69: Our capital structure consists not only of equity
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Our capital structure consists not only of equity Use of hybrids, securitisations etc. lowers cost of capital and levers RoE • Equity capital is by far the most expensive form of capital. Therefore, we make optimal use of equity substitutes: – Convent
Slide 70: Leverage ratios support HR's excellent ratings
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Leverage ratios support HR's excellent ratings S&P's view on Hannover Re EBITDA fixed charge coverage (x)1) Financial leverage2) in % 20 35 30 15 25 20 10 15 10 5 5 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 20
Slide 71: Net risk appetite geared to the desired level with large retrocession programme
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Net risk appetite geared to the desired level with one of the largest retrocession programme in the market Agg. XL ~ EUR 113 m. Cat swaps max. ~ USD 43 m. ~ EUR 2.6 bn. Whole Account XL ~ EUR 286 m. K-Cession securitisation ~ USD 468 m. + expected pre
Slide 72: We pioneered in transferring risks into capital markets via securitisations
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | We pioneered in transferring risks into capital markets via securitisations Equity Substitutes Transactions Expired transactions On-going transactions Portfolio-linked securitisation (P&C), K-Cessions (in m. USD if not otherwise stated) 680 640 600 61
Slide 73: Financial strength ratings
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Financial strength ratings Group S&P A.M. Best General Reinsurance Corp. AA+ A++ Hannover Re AA- A+ Munich Re AA- A+ XL Bermuda AA- A+ 1) SCOR AA- A+ 1) Swiss Re AA- A+ Transatlantic Re A+2) A+ Everest Re A+ A+ PartnerRe A+ A+ Lloyd's A+ A As at 01 Ju
Slide 74: Benefits of an above-average rating
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Benefits of an above-average rating We have a better showing of business than the Our cost of financing in the capital markets average player is lower • Access to all lines of business • Hybrid bonds trade at tighter spreads Low cost of Access to • We
Slide 75: Capital adequacy ratio remains well above targets
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Capital adequacy ratio remains well above targets Increase in SCR driven by business growth and higher asset volumes Development of the Solvency II ratio • Increase in eligible own funds due to issuance of new 251% 243% hybrid bond (EUR 750 m.) as wel
Slide 76: Strong capital generation in line with overall business growth
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Strong capital generation in line with overall business growth Increase in solvency ratio supported by issuance of new hybrid bond Solvency II movement analysis 250% 3.0% -11.6% 8.8% 1.8% 5.9% 200% SCR growth EOF growth driven by new driven by better-
Slide 77: High-quality capital base with 82% Tier 1
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | High-quality capital base with 82% Tier 1 Unutilised Tier 2 provides additional flexibility Reconciliation of IFRS Shareholders’ equity vs. Solvency II own funds in m. EUR 3,365 1,591 16,784 817 15,156 722 680 2,497 15% 627 533 3% Unutilised Tier 2 12
Slide 78: Efficient capital deployment supported by significant diversification
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Efficient capital deployment supported by significant diversification Increase in own funds and capital requirements in line with business growth Solvency Capital Requirements in m. EUR Property & Casualty 5,474 (4,591) Life & Health 3,330 (3,145) Mar
Slide 79: Well diversified within each risk category
| 1 | 2 | 3 | 4 | 5 Capital management | 6 | 7 | Hannover Re is well diversified within each risk category and has a well balanced risk profile Risk capital for the 99.5% VaR (according to economic capital model) in m. EUR Premium (incl. catastrophe) 3,911 Underwriting risk Reserve 3,226 property an
Slide 80: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 80 Hannover Re: the somewhat different reinsurer
Slide 81: Strong premium growth of ~20%; return on equity above target
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Strong premium growth of ~20%; return on equity above target Very solid results despite negative impacts in P&C and L&H GWP F/x-adj. +13.9% NPE F/x-adj. +12.4% EBIT Group net income 9,333 6,710 7,809 404 396 5,693 306 264 +19.5% +17.9% -1.8% -13.
Slide 82: Strong growth in a continued improving pricing environment
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Strong growth in a continued improving pricing environment Underwriting result affected by large losses and reserving related to war in Ukraine Property & Casualty R/I in m. EUR Q1/2021 Q1/2022 Δ YTD Gross written premium 5,693 7,149 +25.6% • GWP
Slide 83: Large losses exceed budget of EUR 284 m. for Q1/2022
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Large losses exceed budget of EUR 284 m. for Q1/2022 Natural and man-made catastrophe losses in m. EUR 2,649 2,127 1,790 1,722 1,595 1,497 1,250 1,127 956 846 850 662 724 578 559 714 573 478 627 426 392 336 2012 2013 2014 2015 2016 2017 2018 2019
Slide 84: Nat-cat losses above budget, man-made losses within expectation
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Nat-cat losses above budget, man-made losses within expectation European storms and Australian floods absorbed entire large-loss budget Catastrophe losses in m. EUR Date Gross Net Storm "Ylenia/Zeynep", Europe 16 - 19 Feb 140.7 124.2 Rain and flo
Slide 85: Combined ratios reflect large losses and precautionary reserving
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Combined ratios reflect large losses and precautionary reserving in property and marine related to war in Ukraine Q1/2022: Combined Ratio vs. target combined ratios EMEA1) 99.6% Regional Americas1) 89.6% markets APAC1) 123.4% Structured Reinsuran
Slide 86: Favourable underlying profitability
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Favourable underlying profitability Results impacted by Covid-19 pandemic - strong earnings in Financial Solutions Life & Health R/I in m. EUR Q1/2021 Q1/2022 Δ YTD Gross written premium 2,116 2,185 +3.2% • GWP f/x-adjusted -1.2%, growth in Morta
Slide 87: Strong return on investment of 3.1%
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Strong return on investment of 3.1% Positive effects from increased reinvestment yields and inflation-linked bonds in m. EUR Q1/2021 Q1/2022 RoI YTD Ordinary investment income1) 322 424 3.0% • Increasing ordinary income from inflation-linked bond
Slide 88: Our business groups at a glance
| 1 | 2 | 3 | 4 | 5 | 6 Interim results Q1/2022 | 7 | Our business groups at a glance Q1/2022 vs. Q1/2021 Property & Casualty R/I Life & Health R/I Total in m. EUR Q1/2021 Q1/2022 Q1/2021 Q1/2022 Q1/2021 Q1/2022 Gross written premium 5,693 7,149 2,116 2,185 7,809 9,333 Net premium earned 3,863 4,782
Slide 89: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 89 Hannover Re: the somewhat different reinsurer
Slide 90: Guidance for 2022
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Outlook | Guidance for 2022 Hannover Re Group • Gross written premium1) ≥ 5% • Return on investment 2) ≥ 2.3% • Group net income 2) EUR 1.4 - 1.5 bn. • Ordinary dividend ≥ prior year • Special dividend if capitalisation exceeds capital requirements for future growth and p
Slide 91: Agenda
Agenda 1 Hannover Re Group 2 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 47 4 Investment management 61 5 Capital management 68 6 Interim results Q1/2022 80 7 Outlook 89 Appendix 91 91 Hannover Re: the somewhat different reinsurer
Slide 92: Financial calendar and our Investor Relations contacts
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | Financial calendar and our Investor Relations contacts 4 August 2022 Karl Steinle General Manager Half-yearly report as at 30 June 2022 Phone: +49 511 5604 - 1500 karl.steinle@hannover-re.com 6 October 2022 Investors’ Day 2022 Axel Bock Senior Investor Relations Manager
Slide 93: Basic information on the Hannover Re share
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | Basic information on the Hannover Re share Basic information International Securities Identification Number (ISIN) DE 000 840 221 5 Ticker symbols -Bloomberg HNR1 -Thomson Reuters HNRGn -ADR HVRRY Exchange listings -Germany Xetra, Frankfurt, Munich, Stuttgart, Hamburg,
Slide 94: Details on reserve review by WTW
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | Details on reserve review by WTW • The scope of WTW’s work was to review certain parts of the held loss and loss adjustment expense reserve, net of outwards reinsurance, from Hannover Re Group’s consolidated IFRS financial statements as at each 31 December 2021, and the
Slide 95: Disclaimer
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 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 appropriateness of investing in an