Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Re — Q1 2004 Earnings Presentation
19 slides from Hannover Rueck's earnings presentation, May 17, 2004
Slide 1: Conference Call on Interim Report 1/2004
Conference Call on Interim Report 1/2004 17 May 2004 ® hannover re
Slide 2: Highlights Q1/2004: Group
HIGHLIGHTS Q1/2004: Group Æ 10th consecutive quarter with strong performance Highlights Q1/2004 Æ Gross premium down, profit up: "Volume is vanity, profit is sanity!" Key figures Q1/2004 • EBIT + 41.8% Strat. Biz Groups • Net income + 36.1% - Property/Casualty R/I Æ Gross written premiums impacted b
Slide 3: Highlights Q1/2004: Segments
HIGHLIGHTS Q1/2004: Segments Æ Property/Casualty R/I: Strong underwriting results Highlights Q1/2004 • Combined ratio 95.4% Key figures Q1/2004 • Catastrophe losses (4.2% pts.) within long-term average Strat. Biz Groups • Loss-reserve comfort level further improved - Property/Casualty R/I Æ Life/Hea
Slide 4: Highlights Q1/2004: Balance sheet further strengthened
HIGHLIGHTS Q1/2004: Balance sheet further strengthened Highlights Q1/2004 Key figures Q1/2004 12/31/2003 Variance 3/31/2004 in m. € Operating cash flow 1,844 n.a. 502 Strat. Biz Groups - Property/Casualty R/I Invested assets1) 22,031 +8.0% 23,792 Stockholders' equity 2,405 +10.5% 2,658 - Life/Health
Slide 5: Key Figures: Group results Q1/2004
KEY FIGURES: Group results Q1/2004 in m. € Q1/2003 Variance Q1/2004 Gross written premiums 3,152 -21.8% 2,464 Highlights Q1/2004 Net premiums earned 1,676 -4.5% 1,601 Key figures Q1/2004 Net underwriting result (94) -41.2% (55) - Net underwriting result incl. interest from funds withheld 30 +93.0% 5
Slide 6: Accounting/Currency effect of shortening the duration of our bond portfolio
ACCOUNTING/CURRENCY EFFECT of shortening the duration of our bond portfolio Assumptions: Highlights Q1/2004 Æ Reserves of $ 100 m., invested in bonds worth $ 100 m. ¬ No currency risk due to natural hedge Key figures Q1/2004 Æ Now: Shortening of the bond portfolio, after $ has lost 10% against the €
Slide 7: Property/Casualty R/I: Strongly improved u/w result
PROPERTY/CASUALTY R/I: Strongly improved u/w result in m. € Q1/2003 Variance Q1/2004 Highlights Q1/2004 Gross written premiums 1,479 -20.2% 1,180 Key figures Q1/2004 Net premiums earned 716 -6.4% 670 Net underwriting result (2) - 31 Strat. Biz Groups Net investment income 56 +119.6% 122 - From asset
Slide 8: Catastrophe Losses 2004: Within long-term average
CATASTROPHE LOSSES* 2004: Within long-term average 1,822 644 in m. € 511 503 500 Highlights Q1/2004 355 361 Key figures Q1/2004 Strat. Biz Groups 243 - Property/Casualty R/I 250 221 206 - Life/Health R/I 149 - Financial R/I 88 85 62 60 71 71 55 55 - Program business 30 30 28 16 0 Investment income 1
Slide 9: Catastrophe Losses 2004: In detail
CATASTROPHE LOSSES* 2004: In detail in m. € Highlights Q1/2004 Hannover Re Group Key figures Q1/2004 Catastrophe loss Gross Net Strat. Biz Groups 3 Aviation/Marine claims 22.5 21.3 - Property/Casualty R/I 1 Fire claim 7.0 7.0 - Life/Health R/I - Financial R/I 4 Major losses 29.5 28.3 - Program busin
Slide 10: Life/Health R/I: Significant increase in profitability
LIFE/HEALTH R/I: Significant increase in profitability in m. € Q1/2003 Variance Q1/2004 Gross written premiums 571 -22.2% 444 Highlights Q1/2004 Net premiums earned 487 -17.9% 400 Key figures Q1/2004 Net underwriting result (56) -38.9% (34) - Net underwriting result incl. interest from funds withhel
Slide 11: Financial R/I: Net income more than doubled again
FINANCIAL R/I: Net income more than doubled again in m. € Q1/2003 Variance Q1/2004 Gross written premiums 458 -22.7% 354 Highlights Q1/2004 Net premiums earned 237 +5.3% 249 Key figures Q1/2004 Net underwriting result (55) +7.7% (59) - Net underwriting result incl. interest from funds withheld 7 +10
Slide 12: Program Business: Focus on portfolio quality
PROGRAM BUSINESS: Focus on portfolio quality in m. € Q1/2003 Variance Q1/2004 Highlights Q1/2004 Gross written premiums 645 -24.5% 487 Net premiums earned 236 +19.4% 282 Key figures Q1/2004 Net underwriting result 19 -60.1% 7 Strat. Biz Groups Net investment income 9 +68.8% 15 - From assets under ow
Slide 13: Investment Return: Extraordinary income turned positive again
INVESTMENT RETURN: Extraordinary income turned positive again in m. € Q1/2003 Variance Q1/2004 Ordinary investment income 260 -1.2% 257 Highlights Q1/2004 - From assets under own management 136 +5.9% 144 - Interest on funds withheld 124 -8.9% 113 Key figures Q1/2004 Extraordinary investment income (
Slide 14: All Strategic Business Groups at a glance
ALL STRATEGIC BUSINESS GROUPS at a glance Property/Casualty Life/Health Financial Program Total R/I R/I R/I Business in m. € Q1/2003 Q1/2004 Q1/2003 Q1/2004 Q1/2003 Q1/2004 Q1/2003 Q1/2004 Q1/2003 Q1/2004 Gross written premiums 1,479 1,180 571 444 458 354 645 487 3,152 2,464 Highlights Q1/2004 Chang
Slide 15: Highlights Q1/2004: In detail
HIGHLIGHTS Q1/2004: In detail Target 2004 Historical Data Biz Group Key figures Q1 2003 2002 2001 P/C R/I Gross-premium growth - (20.2%) (20.5%) 21.9% 45.9% Highlights Q1/2004 Combined ratio - assuming a ≤ 100%* 95.4%9 96.0% 96.3% 116.5% cat-loss ratio (natural & man-made) up to 5% 4.2%9 1.5% 5.2% 2
Slide 16: Outlook for 2004 & 2005
Outlook for 2004 & 2005 ® hannover re
Slide 17: April Renewals: Favorable conditions prevail
APRIL RENEWALS: Favorable conditions prevail Æ ~ 10% renewed as of 1 April 2004: Main renewal for Far-East Highlights Q1/2004 Æ Japan • Hannover Re expanded position as a major cat. XL writer Key figures Q1/2004 • Diversified our portfolio by writing more non-catastrophe business Strat. Biz Groups o
Slide 18: We have more than P/C
WE HAVE MORE than P/C Æ After "More from Less" from 2004 P/C will represent Highlights Q1/2004 • < 40% of gross written premiums Key figures Q1/2004 • ~ 40% of net premiums earned of the total group Strat. Biz Groups • ~ 60% of EBIT and net income - Property/Casualty R/I Æ EBIT of other business gro
Slide 19: Guidance: Unchanged
GUIDANCE: Unchanged Highlights Q1/2004 Key figures Q1/2004 Æ Net earnings 2004 Strat. Biz Groups • € 390 m. - € 430 m. - Property/Casualty R/I • € 3.20 - € 3.60 per share - Life/Health R/I Æ Net earnings 2005 - Financial R/I - Program business • Double-digit increase over 2004 Investment income Outl