Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Re — AIFA Midwinter Insurance Conference 2005
25 slides from Hannover Rueck's conference presentation, Mar 8, 2005
Slide 1: How to achieve profitable growth beyond 2005?
How to achieve profitable growth beyond 2005? Wilhelm Zeller Chairman of the Executive Board Hannover Reinsurance Group Hannover, Germany AIFA Midwinter Insurance Conference New Orleans, 8 March 2005 ® hannover re
Slide 2: Disclaimer
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 any of our securities. While Han
Slide 3: Overview
Overview Æ Hannover Re – the somewhat different reinsurer Æ P/C hard market to last at least for another year Æ Profitable growth beyond 2005 ® hannover re
Slide 4: We are among the top reinsurers in the world
We are among the TOP REINSURERS IN THE WORLD (2003 figures in million USD1)) Rank Group Country GWP NPW HR at a glance 1 Munich Re D 28,650 26,739 - The world's top R/I 2 Swiss Re CH 26,849 24,789 - 10-year development 3 Hannover Re D 14,551 10,538 Berkshire Hathaway2) - Return on equity 4 USA 14,37
Slide 5: Premium growth: strong development of the top-line
PREMIUM GROWTH: Strong development of the top-line . . . in m. € 12,500 12,463 11,507 11,343 HR at a glance - The world's top R/I 10,000 - 10-year development 8,320 - Return on equity 8,156 7,688 - Diversification 7,500 6,706 6,496 - Share price Hard market to last 5,210 - Positive surprises 5,000 4
Slide 6: Earnings per share
. . . and even more so of the bottom-line: EARNINGS PER SHARE1) 3.24 in € 3.03 3 2.75 2.61 HR at a glance 4.13 2.525) 2.37 - The world's top R/I 2.29 2.35 2.14 - 10-year development 2 1.94 - Return on equity - Diversification - Share price Hard market to last 1.15 - Positive surprises 1.01 1.04 1 0.
Slide 7: Return on equity: always above target
RETURN ON EQUITY: Always above target* 26.0% HR at a glance 18% 17.1% 17.1% - The world's top R/I 15.7% 15.3% - 10-year development - Return on equity 13.5% 13.0% 12.7% 12.6% 12.3% 12.2% - Diversification - Share price Hard market to last - Positive surprises 9% - Cycle thermometer - HR market share
Slide 8: ROE peer review: HNR1 one of the highest in the industry
ROE PEER REVIEW: HNR1 one of the highest in the industry 1999 2000 2001 2002 20031) 1999 - 2003 Company Ø- RoE Rank RoE Rank RoE Rank RoE Rank RoE Rank Rank RoE HR at a glance - The world's top R/I Renaissance Re 17% 1 20% 2 18% 1 25% 1 29% 1 22% 1 - 10-year development Hannover Re 14% 2 26% 1 1% 3
Slide 9: From mere P/C reinsurer to the world's most diversified R/I
From mere P/C Reinsurer to THE WORLD'S MOST DIVERSIFIED R/I 1990 2003 HR at a glance Program - The world's top R/I Life/Health R/I Business Property/ 6% 23% Casualty R/I - 10-year development 42% - Return on equity - Diversification - Share price Hard market to last - Positive surprises Property/ -
Slide 10: Stock price since 2002: outperformed our benchmark
STOCK PRICE SINCE 2002: Outperformed our benchmark* 160% HR at a glance - The world's top R/I 140% - 10-year development - Return on equity - Diversification 120% - Share price Hard market to last - Positive surprises 100% - Cycle thermometer - HR market share 80% - P/c time lag - P/C outlook Beyond
Slide 11: Overview
Overview Æ Hannover Re – the somewhat different reinsurer Æ P/C hard market to last at least for another year Æ Profitable growth beyond 2005 ® hannover re
Slide 12: January 2005 renewals held some positive surprises
1 January 2005 renewals held some POSITIVE SURPRISES Æ Surprisingly positive renewals* in most markets Æ both regarding rates and volumes HR at a glance • Stable to marginally declining rates in property - The world's top R/I - 10-year development • Stable to marginally increasing rates in casualty
Slide 13: Our cycle thermometer shows hard market to persist in 2005
OUR CYCLE THERMOMETER* shows hard market to persist in 2005 Proportional Non-proportional 100% 100% HR at a glance 50% 50% - The world's top R/I - 10-year development 0% 0% - Return on equity -50% -50% - Diversification - Share price -100% -100% 96 97 98 99 00 01 02 03 04 05 96 97 98 99 00 01 02 03
Slide 14: Profit-driven growth: managing the cycle
PROFIT-DRIVEN GROWTH: Managing the cycle in % Index 6,0 400 HR at a glance 5,5 350 - The world's top R/I - 10-year development 5,0 300 - Return on equity - Diversification 4,5 250 - Share price 4,0 Hard market to last 200 - Positive surprises 3,5 - Cycle thermometer 150 3,0 - HR market share - P/c t
Slide 15: P/C time lag between u/w year and calendar year
P/C TIME LAG between u/w year & calendar year HR US professional liability portfolio, where 50% of the u/w-year premium is earned in C/Y 1 40% " C/Y 2 HR at a glance - The world's top R/I 10% " C/Y 3 - 10-year development C a le nd a r ye a rs 2002 2003 2004 2005 2006 2007 - Return on equity - Diver
Slide 16: P/C outlook for 2005
P/C OUTLOOK* for 2005 HR at a glance Æ On an underwriting-year basis - The world's top R/I - 10-year development • 2005 will be as good as 2004 - Return on equity - Diversification Æ On a calendar-year basis - Share price Hard market to last • 2005 will be (significantly) better than 2004 - Positive
Slide 17: Overview
Overview Æ Hannover Re – the somewhat different reinsurer Æ P/C hard market to last at least for another year Æ Profitable growth beyond 2005 ® hannover re
Slide 18: Our strategic business groups: four solid legs to stand on
OUR STRATEGIC BUSINESS GROUPS: Four solid legs to stand on ® hannover re HR at a glance - The world's top R/I - 10-year development - Return on equity Property/Casualty Reinsurance Life/Health Reinsurance Financial Reinsurance Program Business - Diversification ® - Share price hannover re hannover l
Slide 19: Profitable growth in Property/Casualty R/I
Program Business Property/ 23% Casualty R/I 42% PROFITABLE GROWTH in Property/Casualty R/I Life/Health R/I 20% Æ 2005 Financial R/I • Double-digit net premium growth (in original currencies) 15% HR at a glance – Restructuring of HDI fronting business and "More from less" completed - The world's top
Slide 20: Profitable growth in Life/Health R/I
Program Business Property/ 23% Casualty R/I 42% PROFITABLE GROWTH in Life/Health R/I Life/Health R/I 20% Æ 2005 Financial R/I 15% • Double-digit net premium growth (in original currencies) vs. 2004 HR at a glance – Excellent growth opportunities, esp. in the German, UK, and Asian markets - The world
Slide 21: Does finite R/I have a future? Yes, it does.
Program Business Property/ 23% Casualty R/I 42% DOES FINITE R/I HAVE A FUTURE? Yes, it does. Life/Health R/I 20% Æ We are not (yet) part of any investigation in the U.S. Financial R/I 15% Æ We entered into Financial R/I more than 25 years ago HR at a glance - The world's top R/I Our underwriting gui
Slide 22: Profitable growth in Financial R/I
Program Business Property/ 23% Casualty R/I 42% PROFITABLE GROWTH in Financial R/I Life/Health R/I 20% Æ 2005 Financial R/I 15% • Premium at around 2004 levels, but volatility in low double-digits HR at a glance - The world's top R/I – Scepticism surrounding FinRe is certainly not a "push" for the b
Slide 23: Profitable growth in Program Business
Program Business Property/ 23% Casualty R/I 42% PROFITABLE GROWTH in Program Business Life/Health R/I 20% Æ 2005 Financial R/I 15% HR at a glance • Gross premiums to fall below 2004 levels by low double-digit percentage - The world's top R/I – Restructuring of cat exposures in Florida - 10-year deve
Slide 24: Further growth in investment volume and income
FURTHER GROWTH in investment volume and income Æ 2005 • Investments grow by mid to high single-digit percentage (in orig. curr.) HR at a glance - The world's top R/I – Still strong operating cash flows due to hard market at or above € 1 bn. - 10-year development – Replacement effect from older, high
Slide 25: Our investor relations team
OUR INVESTOR RELATIONS TEAM Hannover Re Karl-Wiechert-Allee 50 HR at a glance 30165 Hannover, Germany - The world's top R/I Tel. + 49/5 11/56 04 - 0 (Switchboard) - 10-year development - Return on equity Fax: + 49/5 11/56 04 - 16 48 (direct line) - Diversification - Share price Eric Schuh Gabriele B
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