Hannover Rueck Se · XETR:HNR1
Hannover Rueck — Hannover Rück — H1 2014 Earnings Presentation
28 slides from Hannover Rueck's earnings presentation, Aug 6, 2014
Slide 1: Conference Call on Interim Report 2/2014
Conference Call on Interim Report 2/2014 Hannover, 6 August 2014
Slide 2: Favourable results for the first half of 2014
Group Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Favourable results for the first half of 2014 4.9% increase of Group net income; Shareholders' equity up by 8.9% Group Gross written premium: EUR 7,065 m. (-2.2%) GWP impacted by currency fluc
Slide 3: Pleasing underwriting result leads to strong operating profit
Group Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Pleasing underwriting result leads to strong operating profit Half-year result fully in line with 2014 target Group figures in m. EUR Q2/2013 Q2/2014 1H/2013 1H/2014 YTD Gross written premium 3,46
Slide 4: Shareholders' equity increased by 8.9%
Group Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Shareholders' equity increased by 8.9% Policyholders' surplus in m. EUR Change in shareholders' equity in m. EUR 8,947 8,768 8,564 2,233 2,238 1,491 7,338 6,987 661 444 -362 377 63 6,412 1,732 682
Slide 5: Continued positive cash flow despite reduced premium growth
Group Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Continued positive cash flow despite reduced premium growth Increased AuM despite payments of EUR 1.1 bn. for dividends and bond redemption Operating cash flow in m. EUR Assets under own managemen
Slide 6: Pleasing U/W result in a competitive market environment
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Pleasing U/W result in a competitive market environment Non-life reinsurance in m. EUR Q2/2013 Q2/2014 1H/2013 1H/2014 YTD Gross written premium 1,899 1,970 4,097 4,078 GWP f/x-ad
Slide 7: Overall portfolio continues to outperform the MtCR
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Overall portfolio continues to outperform the MtCR Costa Concordia takes its toll in marine Combined Ratio 1H/2014 vs. MtCR in % Target North America* 90.0% markets Germany* 91.0% M
Slide 8: Major losses below expectation
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Major losses below expectation Remaining large loss budget (EUR 565 m.) provides comfortable cushion for 2H/2014 Natural and man-made catastrophe losses1) in m. EUR 2,373 1,730 1,07
Slide 9: Benign large loss experience in 1H/2014
Group Non-life Non-life reinsurance reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Benign large loss experience in 1H/2014 Catastrophe losses* in m. EUR Date Gross Net Snowstorm, Japan 8 Feb 10.5 8.9 Storm "Ela", France/Belgium/Germany 7 - 10 Jun 39.2 33.3 2 Natur
Slide 10: Significantly improved result in life and health reinsurance
Group Non-life reinsurance Life Lifeand and health health reinsurance reinsurance Investments Renewals Outlook 2014 Appendix Significantly improved result in life and health reinsurance Life and health R/I in m. EUR Q2/2013 Q2/2014 1H/2013 1H2014 YTD Gross written premium 1,569 1,470 3,130 2,987 G
Slide 11: Stable ordinary investment income as expected
Group Non-life reinsurance Life and health reinsurance Investments Investments Renewals Outlook 2014 Appendix Stable ordinary investment income as expected RoI on track towards 2014 target of 3.2% in m. EUR Q2/2013 Q2/2014 1H/2013 1H/2014 RoI YTD Ordinary investment income* 263 250 510 494 3.1% Or
Slide 12: Target Matrix 2014
Group Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Target Matrix 2014 Most targets achieved Business group Key figures Strategic targets 1H/2014 Group Return on investment 1) ≥3.2% 3.3% 2) Return on equity ≥9.6% 14.5% Earnings per share growth (y-
Slide 13: Q2/2014 renewals
somewhat diyerent Q2/2014 renewals hannover re’
Slide 14: 17% of our non-life traditional treaty biz was up for renewal in Q2
Group Non-life reinsurance Life and health reinsurance Investments Renewals Renewals Outlook 2014 Appendix 17% of our non-life traditional treaty biz was up for renewal in Q2 Renewals 2014 Traditional treaty reinsurance (excl. structured R/I & ILS and facultative) in m. EUR Various countries Others
Slide 15: Premium reduced by 13% as we discontinued marginal business
Group Non-life reinsurance Life and health reinsurance Investments Renewals Renewals Outlook 2014 Appendix Premium reduced by 13% as we discontinued marginal business We continued to strictly adhere to our selective underwriting approach 2 April to 1 July renewals in m. EUR Premium decrease as exp
Slide 16: Outlook 2014
somewhat diyerent Outlook 2014 hannover re’
Slide 17: Guidance for 2014
Group Non-life reinsurance Life and health reinsurance Investments Renewals 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 increase in volume Return on investment2) ~ 3.2% Group net income3
Slide 18: Overall largely stable portfolio with continued good quality
Group Non-life reinsurance Life and health reinsurance Investments Renewals 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 Americ
Slide 19: Life and health R/I profitability back on track in 2014
Group Non-life reinsurance Life and health reinsurance Investments Renewals 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 ++ S
Slide 20: Appendix
somewhat diyerent Appendix hannover re’
Slide 21: Our strategic business groups at a glance
Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Appendix Our strategic business groups at a glance 1H/2014 vs. 1H/2013 Non-life Life and health Total reinsurance reinsurance in m. EUR 1H/2013 1H/2014 1H/2013 1H/2014 1H/2013 1H/2014 Gross written prem
Slide 22: Our strategic business groups at a glance
Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Appendix Our strategic business groups at a glance Q2 stand-alone Non-life Life and health Total reinsurance reinsurance in m. EUR Q2/2013 Q2/2014 Q2/2013 Q2/2014 Q2/2013 Q2/2014 Gross written premium 1
Slide 23: Asset allocation unchanged
Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Appendix Asset allocation unchanged Rise in assets under management despite EUR 750 m. bond redemption in Feb. Tactical asset allocation 1) Investment category 2010 2011 2012 2013 1H/2014 Fixed-income s
Slide 24: Stress tests on assets under own management
Group Non-life reinsurance Life and health reinsurance Investments Renewals 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% -64 -64 Equity (
Slide 25: Fixed-income book well balanced
Group Non-life reinsurance Life and health reinsurance Investments Renewals 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 66.1%
Slide 26: Currency allocation matches liability profile of balance sheet
Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Appendix Currency allocation matches liability profile of balance sheet Active asset liability management ensures durational match Currency split of investments Modified duration of fixed Others CAD 5
Slide 27: Inflation hedges
Group Non-life reinsurance Life and health reinsurance Investments Renewals Outlook 2014 Appendix Appendix Inflation hedges Positive contribution at mid-year Average hedged inflation level of 2.04% EUR and 2.48% USD p.a. • P&L effect YTD EUR +4.5 m. (thereof EUR -5.2 m.; +9,7 m. EUR of USD) • OCI
Slide 28: Disclaimer
Group Non-life reinsurance Life and health reinsurance Investments Renewals 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