Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Rück — H1 2011 Earnings Presentation
28 slides from Hannover Rueck's earnings presentation, Aug 8, 2011
Slide 1: Conference Call on Interim Report 2/2011
Conference Call on Interim Report 2/2011 Hannover, 8 August 2011
Slide 2: Return on equity of 9.9% despite Q1 losses
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Return on equity of 9.9% despite Q1 losses Q2/2011: positive development after high catastrophe burden in Q1 Very high catastrophe Strong growth in non-life reinsurance burden (+8.3%) Result 1H/201
Slide 3: Net income in line with adjusted guidance for 2011
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Net income in line with adjusted guidance for 2011 Group P/L figures at a glance in m. EUR 1H/2010 Q1/2011 Q2/2011 1H/2011 Variance Gross written premium 5,682 3,143 2,902 6,045 +6.4% Net premium ear
Slide 4: Satisfying Q2/2011 results after difficult Q1/2011
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Satisfying Q2/2011 results after difficult Q1/2011 Q2 with positive underwriting result 1H/2010 Q1/2011 Q2/2011 1H/2011 Variance GWP growth (f/x-adjusted Non-life reinsurance in m. EUR Gross writte
Slide 5: High burden of major losses in 1H/2011
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | High burden of major losses in 1H/2011 Natural and man-made catastrophe losses1) in m. EUR 2,373 1.000 1,775 1,070 1,204 863 800 775 665 672 662 625 600 458 2011e: 410 530 400 370 377 285 291 240 225
Slide 6: High burden of major losses in 1H/2011
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | High burden of major losses in 1H/2011 Catastrophe loss* in m. EUR Date Gross Net Flood Brisbane, Australia 10 - 31 Jan 65.8 54.7 Cyclone "Yasi", Australia 2 - 3 Feb 24.8 19.3 Frost Mexico 3 - 5 Feb
Slide 7: Retrocessions and protections for property NatCat exposure
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Retrocessions and protections for property NatCat exposure Our retro strategy works Recoveries from all retrocessions amounted to EUR 579 m. or 48% of the total gross major losses in 1H/2011 Net
Slide 8: Further growth in life and health, but at a lower rate
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Further growth in life and health, but at a lower rate Reduced earnings due to additional claims and f/x effects Life and health reinsurance in m. EUR 1H/2010 Q1/2011 Q2/2011 1H/2011 Variance GWP g
Slide 9: Satisfying investment income
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Satisfying investment income RoI of assets under own management at 3.7%, incl. inflation swaps at 4.0% 1H/2010 Q1/2011 Q2/2011 1H/2011 Variance Stable ordinary investment in m. EUR income despite f
Slide 10: Steady flows into corporates and covereds
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Steady flows into corporates and covereds Volume stable due to cash flow compensating f/x effects 1) Tactical Asset Allocation Investment category 2007 2008 2009 2010 1H/2011 Fixed-income securities
Slide 11: Target matrix
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Target matrix Strategic targets 2011 Strategic Business group Key figures targets 1H/2011 2010 Non-life R/I Combined ratio - assuming <100%1) 110.3% 98.2% 2) expected net large losses (in m. EUR) ≤
Slide 12: Outlook 2011
hannover re’ Outlook 2011
Slide 13: Pleasing non-life renewals show 12% increase
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Pleasing non-life renewals show 12% increase 2 April 2011 - 1 July 2011 in m. EUR 1 Change of Hannover Re shares: + 2pp 864 Other changes (price & volume): + 8pp 768 20% 18% 10% 1 112% 100% 82% 0 Inf
Slide 14: Pleasing non-life renewals
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Pleasing non-life renewals 2 April 2011 - 1 July 2011 USA Special casualty Property cat. XL • Primary market shows initial signs of stabilisation • Rate increases of +5% to +15% • Stabilising ter
Slide 15: Pleasing non-life renewals
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Pleasing non-life renewals 2 April 2011 - 1 July 2011 Australia Credit/Surety Cat. XL Latin America (surety) • Loss free up 40%; loss to layer up 50-90% • We slightly increased our premium volume
Slide 16: Development of lines of business
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Development of lines of business Growth in most lines and satisfying profitability expected Non-life reinsurance 2011e Divisions Lines of business Volume1) Profitability2) Target North America3) +/
Slide 17: Development of lines of business
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Development of lines of business Growth in most lines and satisfying profitability expected Life and health reinsurance 2011e The five pillars Volume1) Profitability2) Financial Solutions ++ New Ma
Slide 18: Updated guidance for 2011
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Updated guidance for 2011 After 1H/2011 we reiterate our net income target Hannover Re Group • Gross written premium (GWP)1) ……………………………………~ +7% - +8% • Net premium earned (NPE)1) ……………………………………… ~
Slide 19: Appendix
hannover re’ Appendix
Slide 20: Our strategic business groups at a glance
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Our strategic business groups at a glance Non-life Life and health Consolidation Total reinsurance reinsurance in m. EUR 1H/2010 1H/2011 1H/2010 1H/2011 1H/2010 1H/2011 1H/2010 1H/2011 Gross written
Slide 21: Fixed-income book well balanced
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Fixed-income book well balanced Allocation according to our operative diversification Pfandbriefe, Semi- Short-term Governmentals Corporates Covered Bonds, Total governmentals investments, cash ABS A
Slide 22: Focus on high-quality securities
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Focus on high-quality securities Strategically short modified duration Fixed-income portfolio in m. EUR 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ,0 2007 2008 2009 20
Slide 23: No material exposure in Southern Europe and Ireland
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | No material exposure in Southern Europe and Ireland 1) Merely 1.0% of total assets under own management Asset allocation in m. EUR Portugal 30 Ireland 31 1% Spain Italy 166 27 Greece 0 Total assets u
Slide 24: Stress tests
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Stress tests Change in market value Changes in OCI before tax Portfolio Scenario in m. EUR in m. EUR Equities Prices -10% -3 -3 Equities Prices -20% -7 -7 Equities Prices -30% -10 -10 Fixed-income se
Slide 25: Asset allocation of corporate bonds
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Asset allocation of corporate bonds Reflects market spectrum Corporate sector allocation in % Others Others 3% Insurance 5% 12% Publicly Industrials Financials guaranteed 49% 48% 3% Special banks Ban
Slide 26: Realised inflation higher than market expectations
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Realised inflation higher than market expectations Positive impact on market value of inflation hedge Partial hedge of non-life loss inflation provided by USD and EUR Zero Coupon Swaps Aggregated v
Slide 27: Impact of the inflation swaps
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | Appendix | Impact of the inflation swaps Overview of sensitivities Current (30 June 2011) holding of inflation swaps at EUR 2.7 bn. (equivalent swap volume) reacts as follows to underlying risk factors: Chang
Slide 28: Disclaimer
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook 2011 | 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 perf