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01 – 26 | Hannover Re Group
27 – 39 | Property & Casualty reinsurance
40 – 48 | Life & Health reinsurance
49 – 55 | Investment management
56 – 64 | Capital management
65 – 73 | Interim Results Q1/2018
74 – 77 | Outlook 2018
I – IV | Appendix
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Key facts about Hannover Re
1
4
4th largest reinsurer
in the world
Total staff of
~3,300 employees
HR share
Majority shareholder:
50.2% held by Talanx AG
Founded by HDI
(P&C reinsurance only)
1990
Start of L&H reinsurance
as strategic growth segment
1994
Initial Public Offering
of Hannover Re
Legal form as a Societas EuropaeaHannover Rück SE since 2013
>140 subsidiaries, branches/representative offices worldwide
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
2017: India Branch started operations, acquisition of Lloyd’s syndicate Argenta
2009: Opening of an office in Shanghai, China
2008: Branches and representative offices in Brazil, Colombia, Korea and Shanghai
2006: Hannover Re Takaful B.S.C., Bahrain
2001: Hannover Re (Bermuda) Ltd., Bermuda
1997: Selected portfolios of Skandia International
Insurance Company
1996: E+S Rückversicherung AG, Germany
1995: Hannover Rück SE Malaysian Branch, Malaysia
1992: Hannover Reinsurance (Ireland) Ltd., Ireland
1990: Hamburger Internationale Rückversicherungs-AG
1990: Hannover Life Reassurance Company of America
1981: Hannover Reinsurance Group Africa
1980: Hannover Rück SE Canadian Branch, Canada
1979: International Insurance Company of Hannover, Great Britain
From in-house reinsurer to global player
2
>140 subsidiaries, branches/representative offices worldwide
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Group structure supports our business model
3
Majority owner, but operational and financial independence
>140 subsidiaries,
branch/rep. offices
worldwide
Domestic business
64.8%
International business
8 German primary insurers
49.8%
Free floatTalanxAG*
50.2%
* Majority shareholder HDI V.a.G.
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Executive Board of Hannover Rück SE
4
Ulrich Wallin
Chief Executive Officer
Compliance, Controlling,
Corporate Communications,
Corporate Development,
Human Resources Mgmt.,
Innovation Management,
Internal Auditing, Risk Mgmt.
Roland Vogel
Chief Financial Officer
Finance and Accounting
Information Technology
Investment and
Collateral Management
Facility Management
Dr. Michael Pickel
Target Markets: North America,
Continental Europe;
Group Legal Services
Run-Off Solutions
Sven Althoff
Specialty Lines Worldwide:
Marine, Aviation, Credit, Surety and
Political Risks, United Kingdom,
Ireland, London Market and Direct
Business, Facultative R/I
Jürgen Gräber
Global Reinsurance:
Worldwide Treaty R/I, Cat XL,
Structured R/I and ILS;
Coordination of P&C Business Group
Quotations
Retrocession
Dr. Klaus Miller
Life & Health Reinsurance:
United Kingdom/Ireland,
North America, Northern,
Eastern and Central Europe
Claude Chèvre
Life & Health Reinsurance:
Africa, Asia, Australia/New
Zealand, Latin America,
Western and Southern
Europe, Longevity Solutions
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
We are among the top reinsurers in the world
5
For further information please see A.M. Best “Best’s Special Report” (September 2017)
1) Expected to become the 3rd largest reinsurer in 2017
2) Reinsurance only
3) Net premium earned
Premium ranking 2016 in m. USD
Rank Group Country GWP NPW
1 Swiss Re CH 35,622 33,570
2 Munich Re DE 33,154 31,891
3 Hannover Re DE 17,232 15,192
4 SCOR FR 14,569 13,238
5 Berkshire Hathaway Inc.1) US 12,709 12,709
6 Lloyd's2) UK 11,576 8,694
7 RGA US 10,107 9,249
8 China Re CN 7,857 7,517
9 Great West Lifeco CA 6,195 6,112
10 Korean Re KR 5,554 3,903
11 PartnerRe BM 5,357 4,954
12 General Insurance Corporation of India IN 5,210 4,678
13 Transatlantic Holdings US 4,330 3,969
14 Everest Re BM 4,247 3,885
15 XL Group IE 4,240 3,527
3)
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Reinsurance has the character of a specialty market
6
Market size primary insurance vs. reinsurance 2017
Source: ow n research (global market size based on estimate of total ceded premiums by primary insurers) as at May 2018
With a share of ~6% of the overall insurance market
Global insurance premiums
~ EUR 4.3 trillion
Global reinsurance premiums
~ EUR 243 billion
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Growing Property and Casualty reinsurance market
7
Hannover Re outperforms the market
Hannover Re Group
Market +5.2%
Other -6.4%
Top 11-50 +9.1%
Top 10 +6.6%
HR +8.2%
4-year CAGR
2013 2014 2015 2016 2017
Hannover Re
7%
Source: ow n research as at May 2018
Top 10 in 2017: Munich Re, Berkshire Hathaw ay, Sw iss Re, Lloyd's, Hannover Re, SCOR, Everest Re, XL Catlin, GIC India, Alleghany
Top 10 ranking for each year
Top 10
57%
Top 11 - 50
31%
Other
12%
Market size and concentration 2017
151
165
135134
154
in bn. EUR
19%
12%
31%
50%
27%
48%
6% 7%
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Life and Health reinsurance in a global perspective
8
Concentrated market due to high entry barriers
Hannover Re Group
2013 2014 2015 2016 2017
Market size and concentration 2017 in bn. EUR
Source: ow n research as at May 2018
Top 10 in 2017: Munich Re, Sw iss Re, RGA, Great-West Lifeco, SCOR, Hannover Re, China Re, Berkshire Hathaw ay, Korean Re, Pacif ic Life
Top 10 ranking for each year
Top 10
94%
Top 5
67%HR
9%
57 60
79
7075
6%
10%
73%
18%
67%
Market +8.3%
Other +9.8%
Top 6-10 +15.5%
Top 5 +5.8%
HR +3.6%
4-year CAGR
11%
9%
6%Other 6%
Top 6 - 10
27%
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Reinsurance market conditions will improve ...
9
Development of return on equity and Guy Carpenter Global Property Cat RoL index
... when the RoE becomes sufficiently low
Source: Guy Carpenter
Return on equity based on company data (Top 10 of the Global Reinsurance Index (GloRe) w ith more than 50% reinsurance business 2005 - 2017), ow n calculation
0.5%
17.0%
14.0%
(1.2%)
13.7%
10.8%
3.8%
12.8%12.5%
11.4%
9.4% 9.6%
3.4%
150
200
250
300
350
-15%
-11%
-7%
-3%
1%
5%
9%
13%
17%
21%
25%
29%
33%
37%
41%
45%
49%
53%
57%
61%
65%
69%
73%
77%
81%
85%
89%
93%
97%
101%
105%
109%
113%
117%
121%
125%
129%
133%
137%
141%
145%
149%
153%
157%
161%
165%
169%
173%
177%
181%
185%
189%
193%
197%
201%
205%
209%
213%
217%
221%
225%
229%
233%
237%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Return on equity GC Global Property Cat RoL Index
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Global trends
Increasing demand
for insurance of
non-diversifying risks
Strong capital base
Diversification
Expertise in risk
management
Support and expertise
in product development
and pricing
Optimising capital
requirements
Reducing cost of
capital
Managing earnings
volatility
Support in distributing
products in new
markets
Reinsurance is and will be an attractive product
10
Drivers for reinsurance demand
Value proposition R/IImpact on insurance
Global trends Value concentration Protection gap Demographic change
Drivers
De
ma
nd
fo
r re
ins
ura
nce
Capital requirement
Volatile earnings
New products /
markets
Capital requirement Regulatory changes Risk-based capital models Ratings, local GAAP, IFRS
Volatile earnings Expectations of
shareholders, regulators and rating agencies
New risks lead to
higher volatility and need
for additional know-how
High cost of capital/
need for capital
management
High cost of capital
New products/markets Emerging markets Digitalisation/Cyber Emerging risks
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Premium development in line with mid-term growth target
11
Gross written premium in m. EUR
10-year CAGR: +8.0%
61%55%
56% 56% 56% 55%55% 56%
60%
39%
45%44%
44% 44% 45%
45%44%
40%
8,121
11,42912,096
13,774 13,963 14,362
17,06916,354
17,791
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Property & Casualty reinsurance Life & Health reinsurance
10,275
44%
56%
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Africa
Australia
Latin America
Asia
Other European countries
Germany
United Kingdom
North America
Well balanced international portfolio growth
12
Gross written premium (Group) in m. EUR
13,774
12,096
10,275
11,429
13,963 1)
2)
1) Japan 1%
2) CEE and Russia 3%
14,362
17,06916,354
17,791
8,121
34%
14%
7%
17%
14%
5%
6%3%
26%
18%
14%
20%
9%
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Strong earnings track record since 2009
13
Operating profit (EBIT) in m. EUR
2017: satisfactory result despite exceptionally high NatCat losses
(1.05)
6.08 6.215.02
7.04 7.438.17
9.54 9.71
7.95
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
148
1,142 1,178
841
1,3941,229
1,466
1,755 1,689
1,364
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Earnings per share (EPS) in EUR
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
2.102.30
2.10
3.00
3.00 3.25 3.50 3.50
0.40
1.25
1.501.50 1.50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Dividend per share Special dividend per share
4.75
Increased payout ratio allows stable dividends
14
Dividend per share in EUR
Payout: EUR 3.50 ordinary dividend + EUR 1.50 special dividend per share
[0%] [37%] [42%]
Payout ratio:
[35%] [43%]
3.00
[40%]
4.25
[52%] [50%] [51%]
5.00
2.60
[63%]
5.00
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
13.8% 13.4% 13.7%
10.4%11.3%
12.0%
15.0% 14.7% 14.7%13.7%
10.9%11.3%
10.7%10.2% 9.9% 9.8%
5,9606,720
7,8108,533 8,763
2013 2014 2015 2016 2017
Actual
Minimum target*
Average shareholders' equity
RoE target outperformed again ...
15
Return on Equity: yearly Return on Equity: average
... even in the year 2017 with sizeable insured market losses
5-year Ø
2013 – 2017
10-year Ø
2008 – 2017
15-year Ø
2003 – 2017
* After tax; target: 900 bps above 5-year rolling average of 10-year German government bond rate ("risk free")
+2.7%
Spread over minimum target
3.7%4.0% 4.5%
3.8%
1.1%
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Hannover Re is one of the most profitable reinsurers
16
List show s the Top 10 of the Global Reinsurance Index (GloRe)
Data based on company data, ow n calculation
2013 2014 2015 2016 2017
Company RoE Rank RoE Rank RoE Rank RoE Rank RoE Rank avg. RoE Rank
Hannover Re 15.0% 3 14.7% 2 14.7% 1 13.7% 1 10.9% 2 13.8% 1
Peer 4, Bermuda,
Property & Casualty17.1% 2 16.6% 1 13.0% 3 12.7% 2 5.7% 3 13.0% 2
Peer 3, US,
Life & Health6.5% 10 10.6% 7 7.6% 9 10.6% 4 24.1% 1 11.9% 3
Peer 2, Switzerland,
Composite13.7% 5 10.5% 8 13.7% 2 10.6% 3 1.0% 7 9.9% 4
Peer 8, Bermuda
Property & Casualty18.0% 1 13.7% 3 9.5% 8 10.0% 5 -5.3% 9 9.2% 5
Peer 7, Bermuda
Property & Casualty13.8% 4 13.2% 5 10.4% 5 9.6% 6 -1.6% 8 9.1% 6
Peer 6, France,
Composite11.2% 8 9.6% 9 10.7% 4 9.3% 7 4.4% 4 9.0% 7
Peer 1, Germany,
Composite12.5% 6 11.3% 6 10.2% 7 8.3% 8 1.3% 5 8.7% 8
Peer 9, Bermuda
Property & Casualty11.8% 7 13.2% 4 10.3% 6 7.7% 9 -7.2% 9 7.2% 9
Peer 5, US,
Property & Casualty9.4% 9 9.4% 10 7.5% 10 5.9% 10 1.1% 6 6.7% 10
2013 - 2017
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Accelerated value creation since 2009
17
Increase of book value and accumulated paid dividends in EUR
10-year CAGR: +13.1%
23.4730.80
37.39 41.2250.02 48.83
62.61 66.9074.61 70.72
11.48
11.48
13.5815.88
17.98 20.98
23.98
28.23
32.98 37.98
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Book value per share Paid dividends (cumulative since 1994)
As at 31 December
108.70
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
8,5288,997
959
(603) (86)(739)
Shareholders'equity
31.12.2016
Netincome
Dividendpayment
Change inunrealised
gains/losses
Currencytranslationand other
Shareholders'equity
31.12.2017
18
Shareholders' equity has grown significantly in the past 5 years
Policyholders' surplus in m. EUR in m. EUR
2017: increased capital management action and stronger EUR
Change in shareholders' equity
5,888
7,5518,068
8,997 8,528
642
702709
743758
2,238
1,9861,490
1,4911,492
8,768
10,239 10,267
11,231
2013 2014 2015 2016 2017
Shareholders' equity Non-controlling interests Hybrid
10,779
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Strong market positioning – one of the leading reinsurers worldwide
De-risking and diversification measures taken to lower earnings
volatility aiming to consistently produce attractive dividends
Effective cycle management, selective and disciplined underwriting in
Property & Casualty reinsurance
Lean structures which lead to the lowest administrative expense ratio
compared to our peer group
Top rating (S&P: AA-) ensures attractive new business
A superior and highly profitable reinsurer ...
19
Hannover Re's business model
... with a somewhat different approach
Increasing profitability of our non-cyclical Life & Health business
Generates noticeably higher profitability
on 5-year average in comparison with our peer competitors
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Our strategy: value creation through reinsurance
20
Our overriding target: profit and value creation
Premium growth on a long-term basis above market average
Minimum return on equity of at least 900 bps above “risk free” 1)
Achieve a profit in excess of the cost of capital (IVC, based on our ECM 2))
Lower management expenses
Competitive advantage compared to peers
Deliver a profit that is above average for the sector
Providing our clients with competitive terms
Share price to outperform weighted Global Reinsurance Index
(ISIN: DE 000 SLA 1GR 2) over a 3-year rolling period
Consistently paying a dividend that is attractive to our shareholders
Capital management in the light of distributable excess capital to achieve attractive RoE
A sufficient equity buffer enables us to act on available and profitable business at all times
1) After tax; target: 900 bps above 5-year average return of 10-year German government bonds
2) Economic Capital Model
Profit
and
value
creation
Capital management
Costleadership
Shareholdervalue
Profitable growth
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Key performance indicators for the strategic cycle 2018 - 2020
21
Target Matrix
Business group Key figures 2018
Group Return on investment1) ≥ 2.7%
Return on equity2) ≥ 9.5%
Earnings per share growth (y-o-y) ≥ 5%
Economic value creation3) ≥ 6.5%
Solvency ratio4) ≥ 200%
Property & Casualty R/I Gross premium growth5) 3% - 5%
Combined ratio6) ≤ 96%
EBIT margin7) ≥ 10%
xRoCA8) ≥ 2%
Life & Health R/I Gross premium growth9) 3% - 5%
Value of New Business (VNB)10) ≥ EUR 220 m.
EBIT growth ≥ 5%
xRoCA8) ≥ 2%
1) Excl. effects from ModCo derivatives 2) After tax; target: 900 bps above 5-year average return of 10-year German government bonds
3) Grow th in economic equity + paid dividend; target: 600 bps above 5-year average return of 10-year German government bonds
4) According to our internal capital model and Solvency II requirements 5) On average throughout the R/I cycle; at constant f/x rates
6) Incl. expected net major losses 7) EBIT/net premium earned
8) Excess return on allocated economic capital 9) Organic grow th only; annual average grow th (5-year period), at constant f/x rates
10) Based on Solvency II principles and pre-tax reporting
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Sustainability at Hannover Re
22
Strategic approach: We are committed to sustainability, integrity and compliance
Commitment to a responsible and transparent corporate goverance geared to lasting success
Continous refining of our efficiently functioning compliance management
Maintaining an open and ongoing dialogue with our stakeholders
Promoting, preserving and restoring the physical and mental well-being of employees
Promoting diversity and equal opportunities
Continous refinement of our environmental management system
Ongoing evaluation of suppliers according to environmental and social standards
Engagement in environmental and social projects across all locations
Development and Expansion of sustainable insurance products
Refinement of the sustainability approach within our asset management
Intensifying the sharing of knowledge about emerging risks with our customers and business
partners
Su
sta
inab
ilit
y
str
ate
gy
GovernanceandDialogue
ProductResponsibility
Employees
Environment and Society
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Sustainability at Hannover Re
23
Broad range of activities to support our strategic goals
Sustainability Report since 2011
Non-financial statement since 2018
Prime Rating of oekom research and regular
participation in CDP rating
Member of the FTSE4Good Index and MSCI
Participation in various initiatives
Sustainability strategy:
Implementation and regular
revision since 2011
Company daycare center for
infants up to the age of 3
Mentoring programme for women
Implementation of an Employee
Assistance Programme (EAP)
Participation in the initiative “Fair company”
Development of sustainable insurance solutions
(i.e. microinsurance, energy savings warranties)
Sresponsible investment policy since 2012;
Best-in-Class approach implemented since 2016
~ 90 % of assets under own management
are screened according to ESG criteria
according to UN Global Compact
Member of different initiatives like
Geneva-Asssociation and
InsuResilience)
Carbon neutrality achieved for
the Hannover-based business
in 2016
Environmental management
system: certified according to DIN
EN ISO 14001 since 2012 and
EMAS Standard since 2015
Worldwide social engagement for decades
Governance
& Dialogue
Product
Responsibility
Employees Environment
& Society
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Present on all continents
24
Toronto
Charlotte
ChicagoDenver
New YorkOrlando
Bogotá
Hamilton
Mexico City
SydneyKuala Lumpur
Shanghai
Tokyo
Seoul
Manama
Madrid Dublin London Paris Hannover Milan Stockholm
The Americas
Europe
Asia
Africa Australia
Mumbai
Rio de JaneiroJohannesburg
Life & Health reinsurance Property & Casualty and Life & Health reinsuranceProperty & Casualty reinsurance
Taipei
Abidjan
Hannover Re Group
Hong Kong
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
HR share outperforms indices over a 3-year rolling period
25
Performance comparison (incl. reinvested dividends)
Performance vs. indices
60%
80%
100%
120%
140%
160%
180%
200%
Hannover Re HDAX GloRe
+61%
+37%
+31%
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Yearly Total Shareholder Return (TSR) of 12.3%
26
Value creation since IPO in m. EUR 2016 2017
Market capitalisation as of date 12,397 12,651
- Market capitalisation at IPO
(Nov 1994)1,084 1,084
+ Dividend payments
(cumulative)4,338 4,941
- Capital increases
(1996, 1997, 2001, 2003)811 811
Value creation since IPO 14,840 15,697
+1,348%
Hannover Re Group
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
We are a prefered business partner
27
We are somewhat different
Property & Casualty reinsurance
Our
strategic
contribution
from
P&C
Central U/W
Effective cycle management and focus on profitability
• Selective growth: increase market share in “hard” markets only
• No pressure to grow due to low administrative expense ratio
• Above-average profitability due to stringent underwriting approach with focus on bottom line
Conservative reserve policy led to build-up of reserve
redundancies over the last years
• Further strengthening of the confidence level of our P&C reserves may be limited due to IFRS accounting constraints Positive effect on C/R
Distribution channels
• Flexible cost base due to relatively higher share of business written via brokers (~2/3)
Central underwriting with local talent is key to our success
• Secures consistent underwriting decisions
Cyclemgmt.
Reserving
Distribution
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Strategy contribution of the P&C business group
28
Be among world's most profitable R/I & steer volatility in line with our profit targets
Our value proposition to our
customers
Our profit contribution
* xRoCA= eXcess Return on Capital Allocated
Tailor-made solutions
• Comprehensive range of products which
can be tailored to our customers’ needs
Solution driven
• Constant monitoring of markets to identify
trends and classes of business that show
specific potential for the future
Flexible organisation
• Utilisation of all distribution channels,
i.e. direct as well as via intermediaries
Fair and available
• Short lines of communication towards
customers enabling speedy delivery of
solutions
xRoCA* ≥ 2%
EBIT margin ≥ 10%
Combined ratio ≤ 96%
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
29
* All lines of Property & Casualty reinsurance except those stated separately
Our Property & Casualty reinsurance business divisions
Target
markets
Specialty
lines
worldwide
Global
R/I
North America*
Continental Europe*
Marine
Aviation
Credit, surety and political risks
UK, Ireland, London market
and direct
Facultative R/I
Worldwide Treaty R/I*
Cat XL
Structured R/I and ILS
Target markets
29%
Specialty lines
worldwide26%
Global R/I45%
GWP split 2017 EUR 10,711 m.
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
More than 2/3 of our business is written via brokers
30
Breakdown of treaties by volume Breakdown of business written
Proportional67%
Non-proportional
33%
Broker business
70%
Direct business
30%
GWP 2017: EUR 10,711 m.(2016: EUR 9,205 m.)
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
North America
38%
Other Europ.
countries20%
Asia13%
Germany9%
United Kingdom
9%
Latin America
6%
Africa2%
Australia3%
35%
19%
15%
11%
9%
6%3% 2%
Property & Casualty reinsurance: selective growth
31
GWP split by line of business in m. EUR GWP split by regions
* All lines of business except those stated separately
20172016
15%
18%
4%
2014 2015 2016 2017
Cat XL
Structured R/Iand ILS
Worldwidetreaty*
Marine
Aviation
UK, IR, Londonmarket & direct
Credit, suretyand pol. risks
Facultative R/I
ContinentalEurope*
North America*
7,903 14%
19%
3%4%6%
7%
12%
15%
16%
9,338 9,205
15%
18%
12%
7%5%5%3%
19%
12%
4%
4%
18%
15%
11%
7%
5%3%3%
20%
14%
4%
10,711
16%
14%
8%
6%
7%
2%3%
17%
24%
3%
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
7,818 7,903
9,338 9,205
10,711
2013 2014 2015 2016 2017
Premium development in line with selective U/W approach
32
Gross written premium in m. EUR EBIT/EBIT margin in m. EUR
EBIT margin exceeds target of 10%
CAGR:
6.8%
1,061
1,191
1,341 1,340
1,120
15.5%17.0% 16.6% 16.8%
12.2%
2013 2014 2015 2016 2017
EBIT EBIT margin
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
111.3%
93.1%
96.0%
91.1%
140.9%
103.7%
96.3%
121.1%
97.7%
99.8%
0% 20% 40% 60% 80% 100% 120% 140% 160%
North America*
Continental Europe*
Marine
Aviation
Credit, surety and political risks
UK, Ireland, London market and direct
Facultative R/I
Worldwide Treaty* R/I
Cat XL
Structured R/I and ILS
11.4%
19.6%
21.5%
133.0%
18.3%
-18.4%
5.3%
13.2%
-1.7%
4.9%
12.2%
2017: Combined Ratio slightly above MtCR
33
Positive development of reserves led to exceptional aviation result
Combined Ratio vs. MtCR
MtCR = Maximum tolerable Combined Ratio
Target markets
Specialty linesworldwide
Global R/I
Combined Ratio
* All lines of Property & Casualty reinsurance except those stated separately
Total
EBIT
margin
-14.7%
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
At an MtCR of ~96% we earn 900 bps above risk free
34
Net premium
earned
Discount effect on
P&C net loss reserves
(% of NPE)
Capital margin
above risk free
(pre-tax)
Maximum
tolerable
Combined Ratio
As at March 2018
NPE + Economic revaluation - Capital margin = MtCR
+ - =
2018: 100% + 3.6% - 7.4% = 96.2%
2017: 100% + 3.8% - 7.7% = 96.1%
2016: 100% + 3.4% - 7.4% = 96.0%
2015: 100% + 3.8% - 7.6% = 96.3%
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
MtCR varies substantially by line of business
35
2018
As at March 2018
* All lines of Property & Casualty reinsurance except those stated separately
North America*
Continental Europe*
Marine
Aviation
Credit, surety and political risks
Facultative R/I
Cat XL
Worldwide Treaty R/I*
Total Property & Casualty R/I
Capital marginNet premium earned (100%) MtCREconomic revaluation
UK, Ireland, London market and direct
+ - =
Structured R/I and ILS
7.4%
2.2%
15.5%
7.5%
9.2%
6.8%
9.0%
8.4%
13.6%
7.5%
12.0%
3.6%
0.7%
4.0%
3.3%
5.0%
4.9%
3.1%
5.5%
3.2%
3.4%
7.1% 95.1%
95.9%
89.6%
97.0%
94.1%
95.8%
88.6%
95.8%
96.2%
98.1%
98.5%
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Stable redundancy despite challenging environment
36
Reserve study review by WillisTowers Watson confirms redundancies*
Over the last 8 years, on average 2.4% of the net earned loss ratio for P&C
business is due to net reserve redundancy increases
in m. EUR
Year Redundancy Increase redundancy Effect on loss ratioP&C premium
(net earned)
2009 867 276 5.3% 5,230
2010 956 89 1.6% 5,394
2011 1,117 162 2.7% 5,961
2012 1,308 190 2.8% 6,854
2013 1,517 209 3.1% 6,866
2014 1,546 29 0.4% 7,011
2015 1,887 341 4.2% 8,100
2016 1,865 -22 -0.3% 7,985
2009 - 2016
total1,275 53,401
2009 - 2016
average159 2.4% 6,675
* Redundancy of loss and loss adjustment expense reserve for its non-life insurance business against held IFRS reserves, before tax and minority participations.
WillisTow ers Watson review ed these estimates - more details show n in appendix.
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Several levels of protection provide more NatCat capacity ...
37
... and thus create additional earnings at a defined risk appetite
As at March 2018
Div. cat swapsmax. ~ EUR 90 m.
Whole Account~ EUR 280 m.
K-Cession securitisation~ USD 604 m. + expected premium
Group EBITEUR 1,364 m.
~ EUR 2.5 bn.
Agg. XL
~ EUR 200 m.
Policyholders' surplus(shareholders' equity, non-controlling interest, hybrid capital)
2017: EUR 10,779 m.
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
The risk is manageable
38
Stress tests for natural catastrophes after retrocessions
Effect on forecast net income in m. EUR 2016 2017
100-year loss (391.4) (378.2)
250-year loss (541.4) (542.5)
100-year loss (850.3) (921.0)
250-year loss (1,139.4) (1,274.8)
100-year loss (223.9) (183.1)
250-year loss (281.9) (256.6)
100-year loss (363.1) (282.2)
250-year loss (623.5) (522.0)
100-year loss (440.6) (420.2)
250-year loss (795.4) (921.7)
100-year loss (201.0) (154.4)
250-year loss (432.3) (445.5)
in m. EUR Limit 2017 Threshold 2017Actual utilisation
(July 2017)
All natural catastrophe risks*
200-year aggregate annual loss 1,815 1,634 1,409
Earthquake Australia
Winter storm Europe
Hurricane US/Carribean
Typhoon Japan
Earthquake Japan
Earthquake US West Coast
* Loss relative to the underw riting result
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Low expense ratio is an important competitive advantage
39
Hannover Re largely maintained its ratio in contrast to increasing industry trend
Expense ratio (P&C reinsurance)*
* Source: S&P Global Reinsurance Highlights 2017 (TOP 27 global reinsurers' P&C reinsurance business); Hannover Re f igures own calculation
2.5% 2.2%
24.5%
26.4%27.2%28.7%
6.9%
24.4%
31.3%
2010 2011 2012 2013 2014 2015 2016 HannoverRe P&C
2016
HannoverRe P&C
2017
Hannover Re admin expense ratio Hannover Re commission expense ratio Hannover Re expense ratio
Administrative expense ratio Commission expense ratio Expense ratio
Property & Casualty R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
We are somewhat different
40
Life & Health reinsurance
We offer small company flexibility with a large company balance sheet
We are a highly flexible business partner
• Tailor-made services and solutions
• Ability to anticipate market and client demands
We foster an efficient organisational set-up
• 900 experts in 25 offices on all continents
• Highly empowered staff
We have an undogmatic approach
• Entrepreneurial spirit• Appetite to innovate industry solutions
We are committed to responsiveness and time to market
• Rapid decision-making processes
• In-depth knowledge of local markets
Our
strategic
contribution
from
L&H
Responsive
Flexible
Efficient
Undogmatic
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Strategy contribution of the L&H business group
41
We have ambitious profit and growth targets
Our value proposition to our
customers
Our profit contribution
Financial solutions
• Tailored reinsurance structures for efficient
capital or liquidity management
Risk solutions
• Competitive terms, capacity and reinsurance
solutions for all types of technical risks
Reinsurance services
• Improvement of sales and underwriting
processes
VNB1) ≥ EUR 220 m.
EBIT growth ≥ 5%
xRoCA2) ≥ 2%
1) Based on Solvency II principles and pre-tax reporting
2) xRoCA= eXcess Return on Capital Allocated
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Reinsurance universe Positive economic value expected
Writing attractive traditional life & health business
42
Whilst positioning ourselves for sustainable growth with a clear strategic focus
Risk solutions
Provide terms and capacity for all types of technical risks.
Financial solutions
Achieve financial objectives for our clients.
Reinsurance services
Meet the individual needs of our clients.
5 Hard-to-quantify risks
3 Alternative distribution channels
2 Companies in transition
1 High growth markets
4 Underserved consumers
Our strategic focus
5
3
2
1
4
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Our clients are served in the markets by our network of offices
43
and by our solution-orientated expert networks
Automated
U/W systems
R&D
technology
Financial
solutions
Risk
assessment
Health (re-)
insurance
Biometric
research
Longevity
solutions
Expert networks
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Property & Casualty reinsurance business Life & Health reinsurance business
Primary differences between L&H and P&C R/I business
44
Simplified illustration
Share of proportional business (ITO premium) Low High
Reinsurance contract terms Short term Long term
Saving component in premium None Common
Involvement of brokers Low High
Accounting considerations (premium) Single Recurring
Medical / financial underwriting Seldom Often
Multiple primary insurance for the same risk Likely Unlikely
IBNR reserve impact Low High
Number of reinsurer participating in one treaty Few Many
Number of competitors Few Many
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
45
We have well defined reporting categories
Financial solutions
Profitability is less likely to be affected by the
underlying biometric risks
Risk solutions
Profitability depends largely on the underlying
biometric risks
Transactions which include components to provide
alternative means of accessing capital
Mortality
The risk of paying more death benefits than expected
Morbidity
The risk of experiencing a higher claims burden from
traditional health, critical illness, long-term care, and
disability covers
Longevity
The risk of paying annuities and pensions longer than
expected
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
North America
29%
United Kingdom
21%Asia17%
Australia10%
Other Europ.
countries12%
Latin America
5%
Germany3%
Africa3%
Life & Health reinsurance: a well diversified portfolio
46
GWP split by reporting categories GWP split by regionsin m. EUR
25%
15%
46%
17%
19%
46%
18%
30%
24%15%
10%
11%
4%3% 3%
201720162014 2015 2016 2017
Morbidity
Mortality
Longevity
Financialsolutions
18%
46%
19%
17%
7,149
21%
13%
7,080
6,459
7,731
20%
16%
46%
18%
43%
23% 24%
45%
18%
13%
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Good underlying profitability in Life & Health reinsurance
47
6,1456,459
7,731
7,149 7,080
2013 2014 2015 2016 2017
Gross written premium in m. EUR EBIT/EBIT margin
Recent results affected by legacy US mortality business
151
264
405
343
245
2.8%
4.9%
6.2%5.3%
3.8%
2013 2014 2015 2016 2017
EBIT EBIT margin
in m. EUR
CAGR:
3.2%
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Value of New Business (VNB) above target
48
2016 VNB extraordinary high due to large transactions
Value of New Business development in m. EUR
309
448
543
893
364
2013 2014 2015 2016 2017
1) Based on MCEV principles and post-tax reporting (in 2015 cost of capital already increased from 4.5% to 6% in line w ith Solvency II)
2) Based on Solvency II principles and pre-tax reporting
Target
≥ EUR 220 m.
1) 1) 1) 2) 2)
Life & Health R/I
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
415 296689
284 389
612
363
159
463519
649
718
952910 561
550
554
1.305
674
225
2013 2014 2015 2016 2017
Q1 Q2 Q3 Q4
2,225
1,931
3,105
2,331
1,694
Continued positive operating cash flow
49
Operating cash flow in m. EUR in m. EUR
2017: AuM -4.2% driven by strengthening of the Euro and higher dividend payment
Assets under own management (AuM)
31,875
36,228
39,347
41,793 40,057
2013 2014 2015 2016 2017
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Very pleasing net investment income
50
Decrease in total investments mainly driven by strengthening of EUR
Total investments in m. EUR
1,054 1,0961,270 1,218
1,539
357 376
395332
235
2013 2014 2015 2016 2017
Income and expenses on funds withheld andcontract deposits
Net income from assets under own management
Investment income in m. EUR
31,87536,228
39,347 41,793 40,057
14,343
15,91813,990
11,84410,903
46,218
52,146 53,337 53,63750,960
2013 2014 2015 2016 2017
Funds withheld and contract deposits
Assets under own management
1,4121,472
1,6651,550
1,774
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Investment category 31 Dec 2017
Fixed-income securities 87%
- Governments 30%
- Semi-governments 17%
- Corporates 32%
Investment grade 27%
Non-investment grade 5%
- Pfandbriefe, Covered Bonds, ABS 8%
Equities 2%
- Listed Equity <1%
- Private Equity 2%
Real estate/real estate funds 5%
Others 1%
Short-term investments & cash 4%
Total market values in bn. EUR 40.5
Asset allocation
Ordinary income supported by less liquid asset classes
51
Real estate and Private Equity boost ordinary income beyond target return
Economic view based on market values as at 31 December 2017
* Before real estate-specif ic costs
Ordinary income split EUR 1,305 m.
Governments16%
Semi-governments
12%
Corporates33%
Pfandbriefe, Covered
Bonds, ABS9%
Listed Equity2%
Private Equity13%
Real estate*13%
Others1%
Short-term investments
& cash2%
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Barbell strategy stopped and slight risk reduction ...
52
... reflected at government bonds and corporates
Asset allocation1)
Investment category 2014 2015 2016 2017 31 Mar 18
Fixed-income securities 90% 87% 87% 87% 87%
- Governments 21% 26% 28% 30% 32%
- Semi-governments 19% 17% 18% 17% 17%
- Corporates 36% 34% 33% 32% 30%
Investment grade 33% 30% 28% 27% 26%
Non-investment grade 3% 4% 4% 5% 4%
- Pfandbriefe, Covered bonds, ABS 14% 10% 9% 8% 8%
Equities 2% 3% 4% 2% 2%
- Listed equity <1% 1% 2% <1% <1%
- Private equity 2% 2% 2% 2% 2%
Real estate/real estate funds 4% 4% 5% 5% 5%
Others 1% 1% 1% 1% 1%
Short-term investments & cash 4% 5% 4% 4% 5%
Total market values in bn. EUR 36.8 39.8 42.3 40.5 40.9
2)
1) Economic view based on market values w ithout outstanding commitments for Private Equity and Alternative Real Estate as w ell as f ixed-income investments
of EUR 1.271,9 m. (EUR 1,201.9 m.) as at 31 March 2018
2) Of w hich Pfandbriefe and Covered Bonds = 78.8%
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Fixed-income book well balanced
53
Geographical allocation mainly in accordance with our business diversification
IFRS figures as at 31 March 2018
GovernmentsSemi-
governmentsCorporates
Pfandbriefe,
Covered bonds,
ABS
Short-term
investments,
cash
Total
AAA 78.6% 64.1% 1.1% 67.2% - 48.9%
AA 11.7% 23.7% 14.5% 17.2% - 15.6%
A 5.3% 5.9% 33.5% 6.4% - 14.9%
BBB 2.5% 1.5% 43.0% 6.7% - 16.2%
<BBB 1.9% 4.7% 7.8% 2.4% - 4.5%
Total 100.0% 100.0% 100.0% 100.0% - 100.0%
Germany 13.5% 49.4% 4.4% 26.1% 29.3% 19.4%
UK 8.4% 2.3% 8.1% 11.0% 9.6% 7.4%
France 1.1% 1.4% 7.8% 6.3% 0.1% 3.6%
GIIPS 1.0% 1.0% 4.5% 5.4% 0.0% 2.4%
Rest of Europe 2.7% 14.3% 16.0% 18.4% 4.2% 10.5%
USA 59.4% 6.7% 34.4% 9.8% 14.8% 34.9%
Australia 4.0% 7.7% 8.6% 10.9% 7.1% 6.9%
Asia 5.8% 6.3% 5.2% 0.7% 21.1% 6.1%
Rest of World 4.3% 10.8% 11.1% 11.4% 13.8% 8.8%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Total b/s values in m. EUR 13,038 6,966 11,500 2,989 2,052 36,545
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Currency allocation matches liability profile of balance sheet
54
Duration-neutral strategy applied
2017 4.8
2016 5.0
2015 4.4
2014 4.6
2013 4.4
2012 4.5
Modified duration
Currency split of investments
Modified duration of fixed-
income mainly congruent with
liabilities
GBP’s higher modified duration
predominantly due to life
business
Modified duration as at 31 March 2018: 4.8
EUR30.1%
USD45.7%
GBP8.3%
AUD5.7%
CAD2.8%
Others7.4%
5.9
5.22.2
Modified
duration of
portfolio
4.2
6.5
4.7
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Stress tests on assets under own management
55
Unchanged focus on yields and credit spreads; reduced relevance of equities
As at 31 March 2018
Portfolio ScenarioChange in market value
in m. EUR
Change in OCI before tax
in m. EUR
-10% -80 -80
-20% -161 -161
+50 bps -855 -775
+100 bps -1,665 -1,509
Credit spreads +50% -613 -590
Equity (listed and private equity)
Fixed-income securities
Investment mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Our capital structure consists not only of equity
56
Use of hybrids, securitisations etc. lowers cost of capital and levers RoE
Competitive advantage through low cost of capital (WACC)
Equity capital is by far the most expensive
Therefore, we make optimal use of equity substitutes, e.g. hybrid capital
Conventional reinsurance/retrocession on an opportunistic basis
(i.e. use of other reinsurers' capital)
Securitisations, capital market transactions
Type Nominal amount Issue date First call date Maturity Coupon rate
Senior unsecured bondISIN: XS1808482746
EUR 750 m. 2018-04-18 2028-01-18 2028-04-18Annually on every April 18
(commencing April 18, 2019): 1.125% p.a.
Undated subordinated bondFormat: PerpNC10,8ISIN: XS1109836038
EUR 500 m. 2014-09-15 2025-06-26 PerpetualUntil first call date: 3.375% p.a. and thereafter
3.25% p.a. above 3 months EURIBOR
Dated subordinated bondFormat: 30,6NC10,6ISIN: XS0856556807
EUR 500 m. 2012-11-20 2023-06-30 2043-06-30Until first call date: 5.00% p.a. and thereafter
4.30% p.a. above 3 months EURIBOR
Dated subordinated bond Format: 30NC10ISIN: XS0541620901
EUR 500 m. 2010-09-14 2020-09-14 2040-09-14First 10 years: 5.75% p.a. and thereafter 4.235% p.a. above 3 months EURIBOR
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Financial strength ratings
57
As at 1 July 2018
1) Negative outlook
2) Under review w ith developing implications
3) Positive outlook
Group S&P A.M. Best
General Reinsurance Corp. AA+1) A++
Hannover Re AA- A+
Munich Re AA- A+
Swiss Re AA- A+
SCOR AA- A+
Everest Re A+ A+
Transatlantic Re A+ A+
Lloyd's A+1) A
XL Bermuda A+ A2)
PartnerRe A+ A3)
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
We create lower capital charges for our cedents "AA" range S&P capital charge on reinsurance recoverables = 0.8% ("A" = 1.4%, BBB = 3.1%)
As an above-average rated R/I, we "minimise" our cedents' cost of capital
We get very high allocations when we quote for business >90% vs. some 50% for a Bermuda start-up
An above-average rating has numerous benefits ...
58
... although we might not (yet) get paid for it
We are on virtually all broker lists, with cedents often demanding specific R/Is
We have a better showing of business than the average player Access to all lines of business
We enjoy a highly diversified, high quality book of business
Our cost of financing in the capital markets is lower Hybrid bonds trade at tighter spreads
Better conditions for LoCs and credit lines
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Solvency II: Internal capital model approved by BaFin
59
Solvency II
Pillar IQuantitative requirements Capital requirements
(SCR/MCR*) Own funds (solvency balance
sheet) Standard model and internal
model
Hannover Re has received approval for its partial internal capital model. Internal and external risk quantification is therefore largely consistent.
Hannover Re has long had in place an internal control system, the necessary key functions and extensive risk management. Additional requirements arising out of Solvency II have been implemented progressively in recent years.
We support our clients in their preparations for Solvency II through the flexible design of our products and by sharing experiences.
Pillar IIQualitative requirements Internal controls, risk
management and key functions Internal risk assessment Supervisory review procedure
Pillar IIIDisclosure requirements to the regulator and the public with the goal of market
transparency and market discipline
Hannover Re
* SCR = Solvency Capital Requirement; MCR = Minimum Capital Requirement
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Capital position even more comfortable due to OpRisk approval
60
Internal Metrics1)
Solvency II 2)
Solvency II3)
in m. EUR 31.12.2017 31.12.2017 31.12.2016
Available Economic Capital /
Eligible Own Funds13,041 12,296 12,835
Confidence Level 99.5% 99.5% 99.5%
Required Capital /
Solvency Capital Requirements4,729 4,729 5,586
Excess Capital 8,312 7,567 7,249
Capital Adequacy Ratio (CAR) 276% 260% 230%
Minimum Target Ratio
(Limit)180% 180% 180%
Minimum Target Ratio
(Threshold)200% 200% 200%
Capital adequacy above targets with substantial excess capital
1) Internal Metric: full internal model, full transferability of capital
2) Regulatory view (Solvency II): full internal model incl. operational risk (starting Q3/2017), confidence level at 99.5%; ow n funds based on the Solvency II reporting as
of year-end 2017; small deviations compared to annual report since the amounts are based on final Solvency II year end repor ting as presented in the SFCR.
3) Regulatory view (Solvency II): partial internal model w ith standard formula for operational risk, confidence level at 99.5%; small deviations compared to annual report
2016 since the amounts are based on f inal Solvency II year end reporting as presented in the SFCR.
4) Non-available minority interests mostly consist of non-controlling interests in E+S Rückversicherung AG
-745 Haircut for minority
interests4)
Approval of internalmodel for OpRisk
-857
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Increasing buffer above Solvency II capital targets
61
Development of the capital adequacy ratio (regulatory view)
Despite significant changes in economic environment
2016: Overall increase in available capital due to positive results and favourable new
business developments in line with increase in required capital
2017: Increase in solvency ratio due to application of full internal model (including OpRisk),
f/x-induced reduction in funds and capital requirements
11,98312,835 12,296
5,433 5,5864,729
Q4/2015 Q4/2016 Q4/2017
Eligible Capital Solvency Capital Requirements (SCR)
221%230%
260%
Threshold 200%
Limit 180%
87%
4%9%
0.3%
Tier 1 - unrestricted
Tier 1 - restricted
Tier 2
Tier 3
2017 capital composition
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
High-quality capital base
62
87%
9,287503
3,981 1,732
656745
10,636535 4%
1,091 9%
1,273 0.3%
34
Shareholders'equity incl.minorities
(IFRS)
Adjustments forassets under
ownmanagement
Adjustments fortechnicalprovisions
Adjustmentsdue to taxeffects and
others
Foreseeabledividends
Minority haircut Tier 1unrestricted
capital
Hybrid capital Tier 3 Basic ownfunds
Reconciliation (IFRS Shareholders’ Equity/Solvency II Own Funds) in m. EUR
Own funds largely dominated by Tier 1 capital supplemented by hybrid capital
Tier 3
Unutilised Tier 2
capacity
Tier 2
capital
Tier 1
hybrid capital
Tier 1
unrestricted capital
As at year-end 2017; small deviations compared to annual report since the amounts are based on f inal Solvency II year end reporting as presented in the SFCR.
1) Adjustments for technical provisions incl. risk margin
2) Foreseeable dividends and distributions refer to Hannover Rück SE dividend as w ell as dividends to minorities w ithin Hannover Re Group
3) Tier 3 capital arises as a consequence of net deferred tax assets in subsidiaries of the Hannover Re Group. We have changed presentation compared to 2016 due to
a clarif ication of the Solvency II requirements issued in 2017
1)
2)
3)
12,296
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
6,511
4,729
12,296
3,485
2,355
3,462
282
637
3,710
1,782
Property & Casualty
Life & Health
Market
Counterparty default
Operational
Required capital before tax
Deferred taxes
Required capital after tax
Eligible own funds*
Capital efficiency supported by high diversification
63
Risk capital for the 99.5% VaR (according to internal economic capital model) in m. EUR
Details of Solvency II capital requirements
As at 31 December 2017
* According to the internal model (before haircut for minority interest)
36% diversification
10,221
32% 21% 42% 1% 4%
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Hannover Re is well diversified within each risk category ...
64
... and has a well balanced risk profile
Risk capital for the 99.5% VaR (according to economic capital model) in m. EUR
3,485
2,355
3.462
637
2,472
2,254
1,240
1,922
1,531
632
423217
2,371
2,403
1,038
901
821
549
2,251
0 2,000 4,000 6,000
Premium (incl. catastrophe)
Reserve
Underwriting risk property and casualty
Mortality (incl. catastrophe)
Longevity
Morbidity and disability
Lapse
Expense
Underwriting risk life and health
Credit and spread
Interest rate
Foreign exchange
Equity
Real estate
Market risk
Operational risk
Underwriting risk property and casualty
Underwriting risk life and health
Market risk
As at 31 December 2017
26%
50%
39%
4,726
4,726
5,713
Capital requirement
Diversification
Operational risk
Capital mgmt.
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Favourable start to 2018
65
EBIT increase of +8.5% outperforms NPE growth
Figures in EUR
GWP
4,5475,345
Q1/2017 Q1/2018
F/x-adj.: +27.5%; driven by a
few large P&C transactions
NPE EBIT Group net income
3,738 3,999
Q1/2017 Q1/2018
400 434
Q1/2017 Q1/2018
265 273
Q1/2017 Q1/2018
F/x-adjusted: +16.1% Supported by strong underwriting result from both
business groups and above-target investment income
Return on Equity
13.0%Well above minimum
target of 9.5%
Book value per share
P&C R/I EBIT: 339 m.
Very satisfying EBIT margin
(14.0%) supported by strong
investment income
C/R of 95.9% meets the set target
Strong premium growth (f/x-adj.
+38.8%) driven by new business in
Structured R/I and worldwide treaty
L&H R/I EBIT: 96 m.
EBIT growth (+6.9%) driven by
worldwide biz excl. US;
development of legacy US mortality
biz better than expectations
Strong premium growth (f/x-adj.
+9.2%) above expectations
High one-off tax burden due to re-
organisation following US tax reform
Investments NII: 391 m.
RoI from AuM: 3.3%
RoI significantly exceeds target
(≥2.7%)
Stable ordinary income
Realised gains up due to slightly
changed investment strategy
EUR 69.27-2.1%: reduced OCI (i.e. f/x-movement,
interest rates + spread increases)
+17.6%+7.0%
in m. in m. in m. in m.
+8.5% +3.3%
Solvency II ratio
31.12.2017: 260%ERER
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Strong growth in both business groups and pleasing NII ...
66
... produces favourable Group net income
Group figures in m. EUR Q1/2017 Q1/2018 Δ
Gross written premium 4,547 5,345 +17.6%
Net premium earned 3,738 3,999 +7.0%
Net underwriting result (23) 37 -
- Incl. funds withheld 49 96 +93.7%
Net investment income (NII) 393 391 -0.4%
- From assets under own mgmt. 320 333 +4.0%
- From funds withheld 73 59 -19.5%
Other income and expenses 30 5 -82.5%
Operating profit/loss (EBIT) 400 434 +8.5%
Interest on hybrid capital (18) (18) +0.1%
Net income before taxes 382 416 +8.9%
Taxes (96) (117) +21.9%
Net income 286 299 +4.5%
- Non-controlling interests 22 26 +20.3%
Group net income 265 273 +3.3%
Retention 89.6% 91.3%
EBIT margin (EBIT/Net premium earned) 10.7% 10.8%
Tax ratio 25.1% 28.1%
Earnings per share (in EUR) 2.20 2.27
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Significant top and bottom line growth
67
Increased underwriting result and strong investment income
Property & Casualty R/I in m. EUR Q1/2017 Q1/2018 Δ
Gross written premium 2,815 3,579 +27.1%
Net premium earned 2,166 2,425 +12.0%
Net underwriting result
incl. interest on funds withheld96 100 +4.0%
Combined ratio
incl. interest on funds withheld95.6% 95.9% +0.3%p
Net investment income from assets
under own management238 260 +9.2%
Other income and expenses (24) (21) -14.0%
Operating profit/loss (EBIT) 310 339 +9.4%
Tax ratio 24.7% 23.3% -1.4%p
Group net income 215 235 +9.0%
Earnings per share (in EUR) 1.79 1.95
YTD
GWP f/x-adjusted +38.8%; particularly strong growth in
Structured R/I and Worldwide treaty; further growth in
other business lines
NPE f/x-adjusted +22.4%
Major losses of EUR 73 m. below budget for Q1/2018
(3.0% of NPE)
Unchanged policy regarding setting of loss reserves
Satisfactory ordinary investment income and positive
contribution from realised gains
EBIT margin of 14.0%
(Q1/2017: 14.3%), well above target (10%)
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
672
291
863
1,730
662724
559714
846
1,790
90
458
240
662
981
478578
426573
627
1,127
73
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1/2018
Gross Net Expected large losses (net)
Major losses below budget of EUR 167 m. for Q1/2018
68
Natural and man-made catastrophe losses* in m. EUR
* Up to 2011 claims over EUR 5 m. gross, from 2012 onw ards claims over EUR 10 m. gross
Natural and man-made catastrophe losses in % of Property & Casualty premium
13% 5% 14% 25% 9% 9% 7% 8% 9% 17% 3%
11% 5% 12% 16% 7% 8% 6% 7% 8% 12% 3%
Expected large losses (net) in m. EUR
428 450 500 530 560 625 670 690 825 825 825
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Overall benign large loss experience in Q1/2018
69
Catastrophe losses* in m. EUR Date Gross Net
Storm "Friederike", Europe 17. - 18. Jan 47.9 31.5
1 Natural catastrophe 47.9 31.5
1 Property claim 19.1 19.0
1 Credit claim 22.9 22.9
3 Major losses 89.9 73.4
* Natural catastrophes and other major losses in excess of EUR 10 m. gross
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Pleasing EBIT growth of 6.9%
70
US mortality results better than expected
Life & Health R/I in m. EUR Q1/2017 Q1/2018 Δ
Gross written premium 1,732 1,766 +2.0%
Net premium earned 1,572 1,574 +0.1%
Net underwriting result
incl. interest on funds withheld(46) (4) -91.9%
Net investment income from assets
under own management81 72 -10.7%
Other income and expenses 55 28 -50.0%
Operating profit/loss (EBIT) 90 96 +6.9%
EBIT margin 5.7% 6.1% +0.4%p
Tax ratio 28.4% 45.9% +17.5%p
Group net income 61 51 -15.7%
Earnings per share (in EUR) 0.50 0.42
YTD
GWP f/x-adj. +9.2%, mainly from Asia and United
Kingdom
NPE f/x-adjusted growth +7.4%
Improved technical result driven by better morbidity
experience
Stable ordinary investment income
Other income lower due to f/x effects; contribution from
deposit accounted treaties of EUR 45 m. (Q1/2017:
EUR 47 m.)
Targeted EBIT growth of +5% achieved
Tax ratio above long-term average due to changes in
business set-up linked to the US tax reform
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Net investment income well above 2.7% target for 2018
71
Unrealised gains lower due to higher interest rates and credit spreads
* Incl. results from associated companies
in m. EUR Q1/2017 Q1/2018 RoI
Ordinary investment income* 323 317 3.2%
Realised gains/losses 24 49 0.5%
Impairments/appreciations & depreciations (11) (11) -0.1%
Change in fair value of financial instruments
(through P&L)11 6 0.1%
Investment expenses (28) (28) -0.3%
NII from assets under own mgmt. 320 333 3.3%
NII from funds withheld 73 59
Total net investment income 393 391
31 Dec 17 31 Mar 18
On-balance sheet 1,159 740
thereof Fixed income AFS 706 334
Off-balance sheet 489 438
thereof Fixed income HTM, L&R 315 290
Total 1,648 1,177
Unrealised gains/losses of investments
YTD
Ordinary income from fixed income,
private equity and real estate exactly at
last year´s level; slight decrease due to
last year´s dividends from listed equities
Result from realisations out of slightly
changed investment strategy
Impairments only taken on private
equity; major portion still due to regular
depreciation on real estate
Decrease in unrealised gains due to
higher USD and GBP interest rate levels
as well as higher risk spreads on
European and US corporates
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Target Matrix
72
Business group Key figuresStrategic targets for
2018Q1/2018
Group Return on investment1) ≥ 2.7% 3.4%
Return on equity2) ≥ 9.5% 13.0%
Earnings per share growth (y-o-y) ≥ 5% 3.3%
Economic value creation3) ≥ 6.5% n.a.
Solvency ratio4) ≥ 200% 260.0%
Property & Casualty R/I Gross premium growth5) 3% - 5% 38.8%
Combined ratio6) ≤ 96% 95.9%
EBIT margin7) ≥ 10% 14.0%
xRoCA8) ≥ 2% n.a.
Life & Health R/I Gross premium growth9) 3% - 5% 9.2%
Value of New Business (VNB)10) ≥ EUR 220 m. n.a.
EBIT growth ≥ 5% 6.9%
xRoCA8) ≥ 2% n.a.
1) Excl. effects from ModCo derivatives 2) After tax; target: 900 bps above 5-year average return of 10-year German government bonds
3) Grow th in economic equity + paid dividend; target: 600 bps above 4) According to our internal capital model and Solvency II requirements; as of 31 December 2017
5-year average return of 10-year German government bonds 5) On average throughout the R/I cycle; at constant f/x rates
6) Incl. expected net major losses 7) EBIT/net premium earned
8) Excess return on allocated economic capital 9) Organic grow th only; annual average grow th (5-year period), at constant f/x rates
10) Based on Solvency II principles and pre-tax reporting
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Our strategic business groups at a glance
73
Q1/2018 vs. Q1/2017
in m. EUR Q1/2017 Q1/2018 Δ Q1/2017 Q1/2018 Δ Q1/2017 Q1/2018 Δ
Gross written premium 2,815 3,579 +27.1% 1,732 1,766 +2.0% 4,547 5,345 +17.6%
Net premium earned 2,166 2,425 +12.0% 1,572 1,574 +0.1% 3,738 3,999 +7.0%
Net underwriting result 91 92 +1.2% (114) (55) -52.1% (23) 37 -
Net underwritung result incl. funds withheld 96 100 +4.0% (46) (4) -91.9% 49 96 +93.7%
Net investment income 243 268 +10.1% 148 123 -17.2% 393 391 -0.4%
From assets under own management 238 260 +9.2% 81 72 -10.7% 320 333 +4.0%
From funds withheld 5 8 +52.7% 68 51 -25.0% 73 59 -19.5%
Other income and expenses (24) (21) -14.0% 55 28 -50.0% 30 5 -82.5%
Operating profit/loss (EBIT) 310 339 +9.4% 90 96 +6.9% 400 434 +8.5%
Interest on hybrid capital 0 0 - 0 (0) - (18) (18) +0.1%
Net income before taxes 310 339 +9.4% 90 96 +6.9% 382 416 +8.9%
Taxes (77) (79) +3.0% (25) (44) +73.1% (96) (117) +21.9%
Net income 233 260 +11.5% 64 52 -19.4% 286 299 +4.5%
Non-controlling interest 18 25 +41.0% 4 1 -79.7% 22 26 +20.3%
Group net income 215 235 +9.0% 61 51 -15.7% 265 273 +3.3%
Retention 88.6% 91.6% 91.3% 90.7% 89.6% 91.3%
Combined ratio (incl. interest on funds withheld) 95.6% 95.9% 102.9% 100.2% 98.7% 97.6%
EBIT margin (EBIT / Net premium earned) 14.3% 14.0% 5.7% 6.1% 10.7% 10.8%
Tax ratio 24.7% 23.3% 28.4% 45.9% 25.1% 28.1%
Earnings per share (in EUR) 1.79 1.95 0.50 0.42 2.20 2.27
Property & Casualty R/I Life & Health R/I Total
Q1/2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Revised guidance for 2018
74
1) At unchanged f/x rates
2) Subject to no major distortions in capital markets and/or major losses in 2018 not exceeding the large loss budget of EUR 825 m.
3) Excluding effects from ModCo derivatives
4) Relative to group net income according to IFRS
Hannover Re Group
Gross written premium1) more than 10% growth
Return on investment2) 3) at least 2.7%
Group net income2) more than EUR 1 bn.
Dividend payout ratio4) 35% - 40%
(If comfortable level of capitalisation remains unchanged, this ratio will increase
through payment of another special dividend)
Outlook 2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Lines of business Volume1)
Profitability2)
North America3) +
Continental Europe3) +
Marine +/-
Aviation -
Credit, surety and political risks +
UK, Ireland, London market and direct +/-
Facultative reinsurance +
Worldwide treaty3)
reinsurance +/-
Cat XL +/-
Structured reinsurance and ILS +/-
Overall profitability above margin requirements
75
Good growth opportunities in several lines of business
Target markets
Specialty lines worldwide
Global reinsurance
1) In EUR, development in original currencies can be different
2) ++ = w ell above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)
3) All lines of business except those stated separately
Outlook 2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Good underlying profitability in L&H business
76
Further strains from legacy US mortality business expected in 2018
1) In EUR, development in original currencies can be different
2) ++ = w ell above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)
Reporting categories Volume1)
Profitability2)
Financial solutions ++
Longevity +/-
Mortality -
Morbidity +/-
Financial solutions
Risk solutions
Outlook 2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Rationale for our short- and medium-term outlook
77
Attractive earnings contribution from US Financial solutions business
Inforce management in US mortality business could impact EBIT contribution in 2018 due to recaptures
EBIT expectation for 2018: ~EUR 200 m.
Above-target VNB development and inforce management are the basis for IFRS profit growth from 2019 onwards
Normalised ordinary investment income expected at absolutelevel on average of past 5 years
Medium-term growth expecteddue to increase in AuMsupported by positive cash flow and increasing reinvestmentyields
L&H reinsurance InvestmentsP&C reinsurance
Improved rates should support C/R target ≤96% without the need to significantly reduce confidence level of the loss reserves
Strong market position and financial strength enable us to outgrow the market
Increasing profits (EBIT) in the medium term
Stable Return on Investment in a low yield environment
Positioned to outperform
Outlook 2018
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Financial calender and our Investor Relations contacts
Hannover Rück SE | Karl-Wiechert-Allee 50 | 30625 Hannover, Germany | w ww.hannover-re.com
Annual ResultsPress Conference and Analysts’ Conference
7 March 2019
Quarterly Statement as at 30 September 2018
8 November 2018
Investors’ Day 2018
18 October 2018
Half-yearly Report as at 30 June 2018
9 August 2018
1 January P&C Treaty Renewals
5 February 2019
I
Karl Steinle
General Manager
Tel: +49 511 5604 - 1500
karl.steinle@hannover-re.com
Axel Bock
Investor Relations Manager
Tel: +49 511 5604 - 1736
axel.bock@hannover-re.com
Julia Hartmann
Senior Investor Relations Manager
Tel: +49 511 5604 - 1529
julia.hartmann@hannover-re.com
Appendix
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Basic information on the Hannover Re share
II
Basic information
International Securities Identification Number (ISIN) DE 000 840 221 5
Ticker symbols
- Bloomberg HNR1
- Thomson Reuters HNRGn
- ADR HVRRY
Exchange listings
- GermanyXetra, Frankfurt, Munich, Stuttgart, Hamburg, Berlin, Düsseldorf,
Hannover (official trading: Xetra, Frankfurt and Hannover)
- USAAmerican Depositary Receipts
(Level 1 ADR programme; 2 ADR = 1 share)
Market segment Prime Standard
Index inclusion MDAX
First listed 30 November 1994
Number of issued shares* 120,597,134
Common shares* EUR 120,597,134
Share class No-par-value registered shares
As at 31 December 2016
Appendix
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
List of abbreviations
III
A
ABS Asset-Backed Securities
ADR American Depositary Receipts
AFS Av ailable-For-Sale
AG Aktiengesellschaft (public company)
AuM Assets under Management
B
BAT Block Assumption Transactions
biz business
bn. billion
bps basis points
b/s balance sheet
C
CAGR Compound Annual Growth Rate
Cat catastrophe
C/R Combined Ratio
D
E
EBIT Earnings Bef ore Interest and Taxes
ECM Economic Capital Model
EPS Earnings per share
ESG Env ironmental, Social, Governance
F
G
GIIPS Greece, Ireland, Italy, Portugal, Spain
GWP Gross Written Premium
H
HR Hannov er Re
HTM Held-To-Maturity
I
IFRS International Financial Reporting Standards
ILS Insurance-Linked Securities
IPO Initial Public Offering
ISIN International Securities Identification Number
IVC Intrinsic Value Creation
J, K
L
L&R Loans & Receivables
LoC Letter of Credit
LPT Loss Portf olio Transfer
M
m. million
MCEV Market Consistent Embedded Value
MCR Minimum Capital Requirements
mgmt. management
ModCo Modif ied Coinsurance
MtCR Maximum tolerable Combined Ratio
N
n.a. not av ailable
NC non-callable
NII Net Inv estment Income
NPE Net Premium Earned
O
OCI Other Comprehensive Income
P
P&L prof it and loss
p.a. per annum
Perp perpetual
prop. proportional
Q
R
R/I Reinsurance
RoE Return on Equity
RoI Return on Inv estment
S
S&P Standard & Poor's
SCR Solv ency Capital Requirements
SE Societas Europaea (European Company)
T
U
U/Y underwriting y ear
U/W Underwriting
V
V.a.G. Versicherungsverein auf Gegenseitigkeit (mutual insurance company)
VaR Value at Risk
VNB Value of New Business
W
WACC Weighted Av erage Cost of Capital
X
XL eXcess of Loss
xRoCA eXcess Return on Capital Allocated
Y
YTD Year To Date
y -o-y y ear-on-year
Z
Appendix
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix
Details on reserve review by Willis Towers Watson
IV
The scope of Will is Towers Watson’s work was to review certain parts of the held loss and loss adjustment expense reserve, ne t of outwards reinsurance, from Hannover RückSE’s
consolidated financial statements in accordance with IFRS as at each 31 December from 2009 to 2015, and the implicit redundancy margin, for the non-life business of Hannover Rück
SE. Will is Towers Watson concludes that the reviewed loss and loss adjustment expense reserve, net of reinsurance, less the redundancy margin is reasonable in that it falls within Willis
Towers Watson’s range of reasonable estimates.
• Life reinsurance and health reinsurance business are excluded from the scope of this review.
• Willis Towers Watson’s review of non-l ife reserves as at 31 December 2015 covered 98.2% / 98.1% of the gross and net held non -life reserves of €22.8 bil lion and € 21.8 billion
respectively. Together with life reserves of gross €3.7 bil lion and net €3.4 billion, the total balance sheet reserves amount to €26.6 bill ion gross and €25.2 bil lion net.
• The results shown in this presentation are based on a series of assumptions as to the future. It should be recognised that ac tual future claim experience is l ikely to deviate, perhaps
materially, from Willis Towers Watson’s estimates. This is because the ultimate liability for claims will be affected by futu re external events; for example, the likelihood of claimants
bringing suit, the size of judicial awards, changes in standards of l iability, and the attitudes of claimants towards the set tlement of their claims.
• The results shown in Will is Towers Watson’s reports are not intended to represent an opinion of market value and should not b e interpreted in that manner. The reports do not
purport to encompass all of the many factors that may bear upon a market value.
• Willis Towers Watson’s analysis was carried out based on data as at evaluation dates for each 31 December from 2009 to 2015. Wil lis Towers Watson’s analysis may not reflect
development or information that became available after the valuation dates and Will is Towers Watson’s results, opinions and conclusions presented herein may be rendered
inaccurate by developments after the valuation dates.
• As is typical for reinsurance companies, the claims reporting can be delayed due to late notifications by some cedants. This increases the uncertainty in the estimates.
• Hannover Rück SE has asbestos, environmental and other health hazard (APH) exposures which are subject to greater uncertainty than other ge neral l iability exposures. Will is
Towers Watson’s analysis of the APH exposures assumes that the reporting and handling of APH claims is consistent with indust ry benchmarks. However, there is wide variation in
estimates based on these benchmarks. Thus, although Hannover RückSE’s held reserves show some redundancy compared to the indications, the actual losses could prove to be
significantly different to both the held and indicated amounts.
• Willis Towers Watson has not anticipated any extraordinary changes to the legal, social, inflationary or economic environment , or to the interpretation of policy language, that might
affect the cost, frequency, or future reporting of claims. In addition, Willis Towers Watson’s estimates make no provision fo r potential future claims arising from causes not
substantially recognised in the historical data (such as new types of mass torts or latent injuries, terrorist acts), except in so far as claims of these types are included incidentally in
the reported claims and are implicitly developed.
• In accordance with its scope Will is Towers Watson’s estimates are on the basis that all of Hannover RückSE’s reinsurance protection will be valid and collectable. Further liability
may exist for any reinsurance that proves to be irrecoverable.
• Willis Towers Watson’s estimates are in Euros based on the exchange rates provided by Hannover RückSE as at each 31 December evaluation date. However, a substantial
proportion of the liabilities is denominated in foreign currencies. To the extent that the assets backing the reserves are no t held in matching currencies, future changes in exchange
rates may lead to significant exchange gains or losses.
• Willis Towers Watson has not attempted to determine the quality of Hannover RückSE’s current asset portfolio, nor has Will is Towers Watson reviewed the adequacy of the balance
sheet provisions except as otherwise disclosed herein.
In its review,Will isTowers Watson has relied on audited and unaudited data and financial information supplied by Hannover RückSE and its subsidiaries, including information provided
orally. Willis Towers Watson relied on the accuracy and completeness of this information without independent verification.
Except for any agreed responsibil ities Will is Towers Watson may have to Hannover Rück SE, Will is Towers Watson does not assume any responsibil ity and will not accept any liabil ity to
any person for any damages suffered by such person arising out of this commentary or references to Will is Towers Watson in th is document.
Appendix
Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 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 their own analysis regarding
the appropriateness of investing in any of our securities.
While Hannover Re has endeavoured to include in this presentation information it believes to be reliable,
complete and up-to-date, the company does not make any representation or warranty, express or implied,
as to the accuracy, completeness or updated status of such information.
Some of the statements in this presentation may be forward-looking statements or statements of future
expectations based on currently available information. Such statements naturally are subject to risks and
uncertainties. Factors such as the development of general economic conditions, future market conditions,
unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the
actual events or results to be materially different from those anticipated by such statements.
This presentation serves information purposes only and does not constitute or form part of an offer
or solicitation to acquire, subscribe to or dispose of, any of the securities of Hannover Re.
© Hannover Rück SE. All rights reserved.
Hannover Re is the registered service mark of Hannover Rück SE.
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