DGAP-News: Hannover Re reports very good half-yearly result
(firmenpresse) - DGAP-News: Hannover Rückversicherung AG / Key word(s): Half Year
Results
Hannover Re reports very good half-yearly result
10.08.2012 / 07:30
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Hannover Re reports very good half-yearly result
- Gross premium: + 14.0% to EUR 6.9 billion
- Considerable improvement in non-life and life/health reinsurance
- Net burden of major losses significantly lower than expected at EUR
132.4 million
- Very good investment income of EUR 709.5 million (previous year: EUR
672.8 million)
- Operating profit (EBIT): EUR 597.2 million (EUR 248.9 million)
- Very good Group net income: +85.5% to EUR 405.3 million (EUR 218.5
million)
- Earnings per share: EUR 3.36 (EUR 1.81)
- Book value per share: + 10.1% to EUR 45.37
- Return on equity: 15.5% (9.9%)
Hannover, 10 August 2012: Hannover Re expressed considerable satisfaction
with its results as at 30 June 2012. 'The first half-year was a pleasing
one for our company overall,' Chief Executive Officer Ulrich Wallin
affirmed. 'Both the operating profit and Group net income are significantly
higher than the comparable figures for the previous year.' Key drivers here
were the markedly better results delivered by both business groups as well
as investment income that was highly gratifying despite the challenging
capital market climate.
Substantial premium growth in the first half of 2012
Gross written premium for the Hannover Re Group surged by an appreciable
14.0% to reach EUR 6.9 billion (EUR 6.0 billion) as at 30 June 2012. At
constant exchange rates growth would have amounted to 9.6%. The level of
retained premium retreated slightly to 89.8% (90.8%). Net premium earned
climbed 13.1% to EUR 5.8 billion (EUR 5.1 billion), equivalent to growth of
8.8% adjusted for exchange rate effects.
The operating profit (EBIT) as at 30 June 2012 came in at a very pleasing
EUR 597.2 million; in the corresponding period of the previous year EBIT
had amounted to just EUR 248.9 million owing to the heavy burden of major
losses. Group net income improved by a substantial 85.5% to EUR 405.3
million (EUR 218.5 million). Earnings per share amounted to EUR 3.36 (EUR
1.81).
Very pleasing result in non-life reinsurance
The situation on the international reinsurance markets was broadly positive
for non-life business. 'In the treaty renewals as at 1 April in Japan,
Korea and the United States we actually achieved an even better outcome in
some cases than in the round of renewals at the beginning of the year', Mr.
Wallin commented. As anticipated, the rate increases for property
catastrophe business were again appreciable owing to the natural disasters
in 2011.
Gross premium in non-life reinsurance improved on the comparable period by
15.1% to reach EUR 4.1 billion (EUR 3.5 billion). At constant exchange
rates, especially against the US dollar, growth would have come in at
11.3%. The level of retained premium was virtually unchanged at 90.2%
(90.0%). Net premium earned climbed 16.0% to EUR 3.3 billion (EUR 2.8
billion); growth of 12.2% would have been recorded after adjustment for
exchange rate effects.
The major loss situation for Hannover Re was again moderate in the second
quarter. The total net expenditure as at 30 June 2012 of EUR 132.4 million
(EUR 625.2 million) was well below the loss expectancy. The largest single
events in the second quarter were the severe earthquakes on 20 and 29 May
affecting a number of Italian provinces in the region of Emilia-Romagna,
resulting in net loss expenditure of altogether around EUR 61 million for
Hannover Re.
The underwriting result including interest on funds withheld closed at a
pleasing EUR 105.3 million (-EUR 293.3 million). The resulting combined
ratio for the first half-year improved markedly on the comparable period to
reach 96.8% (110.3%). The operating profit (EBIT) in non-life reinsurance
was more than doubled to EUR 430.6 million (EUR 151.2 million). Group net
income increased sharply to EUR 305.6 million (EUR 164.1 million). Earnings
per share stood at EUR 2.53 (EUR 1.36).
Promising business opportunities in life and health reinsurance
The general business environment in international life and health
reinsurance remains favourable. Mature insurance markets such as the United
Kingdom, United States and Germany as well as emerging markets in Asia -
most notably China and Sharia-compliant retakaful business - continue to
present attractive opportunities for profitable growth. 'We are currently
focusing our structures even more sharply on our growth markets', Mr.
Wallin explained. 'Thus, for example, by setting up our new 'Asia' business
center we are concentrating the new business potential offered by Asian
markets and hence aligning ourselves even more closely with the needs of
our clients.' In another move, with the creation of its 'Longevity'
business center Hannover Re is responding to the growing importance of
pensions business.
Gross written premium totalled EUR 2.8 billion (EUR 2.5 billion) as at 30
June 2012. This is equivalent to growth of 12.4%, or 7.3% at constant
exchange rates. Net premium earned climbed 9.7% to EUR 2.5 billion (EUR 2.3
billion); growth would have been 4.7% after adjustment for exchange rate
effects.
The operating profit (EBIT) amounted to EUR 155.2 million (EUR 78.4
million), a reflection of the good quality and positive development of the
book of life and health reinsurance. The EBIT margin stood at 6.2% (3.4%).
Group net income for life and health reinsurance as at 30 June 2012
improved on the comparable six months by a substantial 73.1% to reach EUR
127.9 million (EUR 73.9 million). Earnings per share totalled EUR 1.06 (EUR
0.61).
Highly satisfactory investment income
Although capital markets continue to be under strain, Hannover Re is
thoroughly satisfied with the development of its investments. The portfolio
of investments under own management grew by a further 6.8% relative to the
level as at 31 December 2011 to reach EUR 30.3 billion (EUR 28.3 billion).
Net income from assets under own management climbed to EUR 553.2 million
(EUR 511.5 million) as at 30 June 2012. The annualised average return on
the investments under own management stood at a very pleasing 3.8% and thus
exceeded the targeted return for the year of 3.5%. Ordinary investment
income excluding interest on funds withheld and contract deposits totalled
EUR 532.0 million, a figure well above that of the comparable period (EUR
447.9 million) despite the protracted low level of interest rates. Ordinary
investment income was thus crucial in boosting the net income from
investments under own management. Interest on funds withheld and contract
deposits contracted slightly to EUR 156.3 million (EUR 161.3 million) owing
to the sustained low interest rate level.
The unrealised gains on assets recognised at fair value through profit or
loss, which are influenced primarily by changes in the value of the
inflation swaps and ModCo derivatives, reverted to normal levels at the end
of the first half-year after the very positive development in the first
three months. Altogether, they amounted to EUR 2.9 million (EUR 53.7
million). Looked at on the basis of individual quarters, movements in
unrealised gains and losses were highly volatile. While this item showed a
gain of EUR 84.6 million in the first quarter, a loss of EUR 81.6 million
was booked in the second quarter. The principal factors here were lower
inflationary expectations as well as the widening of credit spreads on
capital markets.
Including interest on funds withheld and contract deposits, Hannover Re
generated net investment income of EUR 709.5 million (EUR 672.8 million).
Shareholders' equity further boosted
Hannover Re's equity base was further strengthened to EUR 5.5 billion (31
December 2011: EUR 5.0 billion). The total policyholders' surplus
(including non-controlling interests and hybrid capital) grew by 6.7% to
EUR 7.8 billion (EUR 7.3 billion). The book value per share rose 10.1% to
EUR 45.37 (31 December 2011: EUR 41.22). The annualised return on equity
improved from 9.9% to 15.5%.
Outlook
In view of the continuing attractive market opportunities in non-life and
life/health reinsurance as well as the gratifying Group net income as at 30
June 2012, Hannover Re anticipates a good result for the full 2012
financial year. At unchanged exchange rates the company expects gross
premium to grow by 5% to 7%.
Market conditions in non-life reinsurance continue to be highly promising.
Following on from the favourable treaty renewals as at 1 April, it was for
the most part possible to obtain further rate increases in the renewal
round on 1 July. 'In Australia and New Zealand we were again able to push
through appreciable rate increases and improved conditions, as a
consequence of which we slightly enlarged our overall premium volume here
while reducing the exposure', Mr. Wallin noted. In North America no
consistent market hardening could be observed. While rate rises of 5% to
10% were obtained for property catastrophe business, particularly vigorous
increases of 20% to 30% were attainable for loss-impacted programmes in
non-proportional property reinsurance. Rates and conditions for casualty
business held stable. For 2012 Hannover Re is looking to grow its gross
premium income from total non-life reinsurance by 5% to 7% after adjustment
for exchange rate effects.
Prospects for life and health reinsurance similarly remain bright. In view
of the broad range of business opportunities, Hannover Re anticipates
organic growth of 5% to 7% in its gross premium volume for 2012.
Hannover Re stands by its targeted return on investment of 3.5% for the
asset portfolio in 2012.
Based on the good business prospects overall in non-life and life/health
reinsurance as well as its strategic orientation, Hannover Re is looking
forward to a pleasing 2012 financial year. This is conditional on the
burden of major losses not significantly exceeding the expected level of
EUR 560 million for the full year and assumes that there are no drastic
downturns on capital markets.
As for the dividend, Hannover Re continues to aim for a payout ratio in the
range of 35% to 40% of its IFRS Group net income after tax.
For further information please contact:
Corporate Communications:
Karl Steinle (tel. +49 511 5604-1500,
e-mail: karl.steinle(at)hannover-re.com)
Media Relations:
Gabriele Handrick (tel. +49 511 5604-1502,
e-mail: gabriele.handrick(at)hannover-re.com)
Investor Relations:
Julia Hartmann (tel. +49 511 5604-1529,
e-mail: julia.hartmann(at)hannover-re.com)
Please visit: www.hannover-re.com
Hannover Re, with a gross premium of around EUR 12 billion, is the
third-largest reinsurer in the world. It transacts all lines of non-life
and life and health reinsurance and is present on all continents with
around 2,200 staff. The rating agencies most relevant to the insurance
industry have awarded Hannover Re very strong insurer financial strength
ratings (Standard&Poor's AA- 'Very Strong' and A.M. Best A 'Excellent').
Please note the disclaimer:
www.hannover-re.com/misc/disclaimer-pr-050811
Key figures of the Hannover Re Group (IFRS basis)
in EUR million H1/ +/- previous H1/ 2011
2012 year 2011
Hannover Re Group
Gross written premium 6,888.4 14.0% 6,044.8
Net premium earned 5,824.8 13.1% 5,147.9Net underwriting result (13.2) (446.3)
Net investment income1) 709.5 5.4% 672.8
Operating profit / loss (EBIT) 597.2 140.0% 248.9
Group net income (loss) 405.3 85.5% 218.5
Earnings per share in EUR 3.36 85.5% 1.81
Retention 89.8% 90.8%
EBIT margin2) 10.3% 4.8%
Return on equity (after tax)3) 15.5% 9.9%
in EUR million H1/ +/- previous H1/ 2011
2012 year 2011
Policyholders' surplus4) 7,832.6 6.7% 7,338.2
Investments (excl. funds held 30,281.9 6.8% 28,341.2
by ceding companies)
Total assets 53,412.0 7.1% 49,867.0
Book value per share in EUR 45.37 10.1% 41.22
Non-life reinsurance
in EUR million H1/ +/- previous H1/ 2011
2012 year 2011
Gross written premium 4,079.7 15.1% 3,544.5
Net premium earned 3,303.4 16.0% 2,848.6
Net underwriting result 99.2 (299.4)
Operating profit / loss (EBIT) 430.6 184.8% 151.2
Group net income (loss) 305.6 86.2% 164.1
Retention 90.2% 90.0%
Combined Ratio5) 96.8% 110.3%
EBIT margin2) 13.0% 5.3%
Life and health reinsurance
in Mio. EUR H1/ +/- previous H1/ 2011
2012 year 2011
Gross written premium 2,808.8 12.4% 2,499.8
Net premium earned 2,521.4 9.7% 2,297.7
Operating profit / loss (EBIT) 155.2 97.9% 78.4
Group net income (loss) 127.9 73.1% 73.9
Retention 89.2% 92.1%
EBIT margin2) 6.2% 3.4%
1) Including income/expense on funds withheld and contract depositsKey figures of the Hannover Re Group (IFRS basis)
2) Operating profit / loss (EBIT) / net premium earned
3) Annualised
4) Equity attributable to shareholders of Hannover Re + non-controlling
interests + hybrid capital
5) Including interest income on contract deposits and funds withheld
in EUR million Q2/2012 +/- previous Q2/2011 2011
year
Hannover Re Group
Gross written premium 3,377.9 16.4% 2,901.7
Net premium earned 3,008.6 13.2% 2,657.2
Net underwriting result (13.6) (63.7)
Net investment income1) 268.8 (4.3%) 280.8
Operating profit / loss 204.0 1.2% 201.5
(EBIT)
Group net income (loss) 144.0 (13.4%) 166.2
Earnings per share in 1.19 (13.4%) 1.38
EUR
Retention 88.5% 92.5%
EBIT margin2) 6.8% 7.6%
Return on equity (after 10.6% 15.3%
tax)3)
Non-life reinsurance
in EUR million Q2/2012+/- previous Q2/2011 2011
year
Gross written premium 1,963.1 21.2% 1,620.2
Net premium earned 1,748.7 18.8% 1,472.3
Net underwriting result 52.5 66.9% 31.4
Operating profit / loss 167.4 (4.7%) 175.7
(EBIT)
Group net income (loss) 132.4 (9.9%) 146.8
Retention 89.1% 92.6%
Combined Ratio5) 96.8% 97.7%
EBIT margin2) 9.6% 11.9%
Life and health
reinsurance
in Mio. EUR Q2/2012 +/- previous Q2/2011 2011
year
Gross written premium 1,414.8 10.5% 1,280.5
Net premium earned 1,259.9 6.5% 1,183.3
Operating profit / loss 33.0 65.3% 20.0
(EBIT)
Group net income (loss) 27.8 (14.2%) 32.4
Retention 87.6% 92.6%
EBIT margin2) 2.6% 1.7%
1) Including income/expense on funds withheld and contract depositsEnd of Corporate News
2) Operating profit / loss (EBIT) / net premium earned
3) Annualised
4) Equity attributable to shareholders of Hannover Re + non-controlling
interests + hybrid capital
5) Including interest income on contract deposits and funds withheld
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10.08.2012 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: Hannover Rückversicherung AG
Karl-Wiechert-Allee 50
30625 Hannover
Germany
Phone: +49-(0)511-5604-1500
Fax: +49-(0)511-5604-1648
E-mail: info(at)hannover-re.com
Internet: www.hannover-re.com
ISIN: DE0008402215
WKN: 840 221
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover;
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart; Terminbörse EUREX
End of News DGAP News-Service
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181153 10.08.2012
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