DGAP-News: Hannover Re achieves record result and increases dividend
(firmenpresse) - DGAP-News: Hannover Rückversicherung AG / Key word(s): Final Results
Hannover Re achieves record result and increases dividend
07.03.2013 / 07:45
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Hannover Re achieves record result and increases dividend
- Group net income: EUR 858.3 million (EUR 606.0 million)
- Premium growth + 13.9% (currency-adjusted + 9.5%)
- Book value per share + 21.8%
- Return on equity: 15.6% (12.8%)
- Investment income rises to EUR 1.7 billion (EUR 1.4 billion)
- Net major loss expenditure: EUR 477.8 million (EUR 980.7 million)
- Combined ratio: 95.8% (104.3%)
- Increased dividend proposal for 2012: EUR 2.60 (EUR 2.10 ) + EUR 0.40
bonus per share
Hannover, 7 March 2013: Hannover Re has posted the best result in the
company's history with net income of EUR 858.3 million. The most important
keys to this success were solid growth, a good underwriting result in
non-life reinsurance and exceptionally pleasing investment income. 'Our
shareholders should also share in this success. The Executive Board and
Supervisory Board will therefore propose to the Annual General Meeting that
a dividend of EUR 2.60 and a bonus of EUR 0.40 per share should be paid',
Chief Executive Officer Ulrich Wallin stated.
2012 financial year
Gross written premium in total business increased by a pleasing 13.9% to
EUR 13.8 billion (EUR 12.1 billion). At constant exchange rates -
especially against the US dollar - the increase would have been 9.5%.
Growth thus exceeded the forecast range of 7% to 8%, which itself had been
revised upwards during the year. The level of retained premium decreased
slightly to 89.8% (91.2%). Net premium earned climbed 14.2% to EUR 12.3
billion (EUR 10.8 billion). At unchanged exchange rates the increase would
have been 9.9%.
The operating profit (EBIT) as at 31 December 2012 soared to EUR 1,406.5
million (EUR 841.4 million). Group net income surged 41.6% to EUR 858.3
million (EUR 606.0 million). Earnings per share consequently rose
appreciably to EUR 7.12 (EUR 5.02).
Non-life reinsurance delivers very pleasing profit contribution
The state of the market in non-life reinsurance was favourable. 'Not least
owing to the major losses in 2011, we were able to push through price
increases for most business segments. As a result, the rate level for our
company in 2012 was significantly better than in the previous year', Mr.
Wallin noted. Markets in Asia and Australia that had suffered losses in
2011 were particularly important drivers of growth. In addition, gratifying
growth rates were recorded in North America and in global facultative
reinsurance.
Altogether, gross written premium in non-life reinsurance increased by
13.1% (currency-adjusted: 9.3%) to EUR 7.7 billion (EUR 6.8 billion);
growth rates thereby beat the forecast target range of 5% to 7%. The level
of retained premium retreated slightly to 90.2% (91.3%). Net premium earned
rose sharply by 15.0% to EUR 6.9 billion (EUR 6.0 billion).
In contrast to the previous year, the major loss situation in the year
under review was comparatively moderate. Costing in excess of USD 20
billion, the largest loss for the international insurance industry was
Hurricane Sandy, which caused fatalities and considerable devastation along
the US East Coast. The net loss for Hannover Re from this event was EUR
257.5 million. Further major losses included the wreck of the 'Costa
Concordia' cruise ship and the protracted drought in the United States, at
a cost of EUR 53.3 million and EUR 43.3 million respectively for net
account. Total major loss expenditure for 2012 came in at EUR 477.8 million
net - roughly half that of the previous year (EUR 980.7 million) - and
remained within the calculated major loss budget of EUR 560 million. The
combined ratio consequently improved to a very good 95.8% (104.3%). The
underwriting result increased from EUR -268.7 million to EUR 272.2 million.
The operating profit (EBIT) for non-life reinsurance as at 31 December 2012
rose by 82.2% to EUR 1,091.9 million (EUR 599.3 million); Group net income
climbed to EUR 685.9 million (EUR 455.6 million). Earnings per share stood
at EUR 5.69 (EUR 3.78).
Life and health reinsurance stays on growth track
In life and health reinsurance, too, Hannover Re continued to grow. 'We
generated above-average growth in the United States, using the platform
acquired in 2009 under the ING transaction to expand our business', Mr.
Wallin explained. 'We also recorded appreciable gains in Australia, but
first and foremost in the emerging markets of China and Latin America.'
Gross premium in the financial year just ended grew to EUR 6.1 billion (EUR
5.3 billion), a pleasing increase of 14.9%. Adjusted for exchange rate
effects, growth would have been 9.8%, hence surpassing the target range of
5% to 7%. Net premium also rose sharply by 13.3% to EUR 5.4 billion (EUR
4.8 billion).
The operating result (EBIT) in life and health reinsurance increased by
33.7% to EUR 291.1 million (EUR 217.6 million). This improved profitability
was assisted by pleasing fair value gains on so-called ModCo derivatives,
which produced a profit contribution of some EUR 52 million. The EBIT
margin improved to 5.4% (4.5%). Group net income in life and health
reinsurance climbed 26.7% to EUR 230.9 million (EUR 182.3 million) and thus
outpaced the growth in gross premium income. Earnings per share amounted to
EUR 1.91 (EUR 1.51).
Particularly gratifying investment income
Although interest rates continued to fall in the year under review, the
return on investment for the portfolio of assets under own management
comfortably surpassed the targeted 3.5% to reach 4.3%. Driven mainly by the
positive cash flow from operating activities, assets under own management
grew to EUR 31.9 billion, an increase of 12.5% relative to the end of the
previous year (EUR 28.3 billion). Including funds withheld and contract
deposits, the total volume of assets grew to EUR 46.6 billion (EUR 41.7
billion).
Ordinary investment income excluding income from funds withheld and
contract deposits came in well above the level of the previous year (EUR
966.2 million) at EUR 1,088.4 million. This can be attributed primarily to
the enlarged investment portfolio on the basis of what continues to be a
very positive cash flow, although substantial planned expansion in the
asset classes of corporate bonds and asset-backed securities over the past
two years was also a factor here. The balance of net realised gains and
losses was higher than in the previous year at EUR 227.5 million (EUR 179.6
million). Investment income was also boosted by the rise in unrealised
gains: the balance of unrealised gains and losses was positive at EUR 89.3
million, compared to losses of EUR 38.8 million in the previous year. This
was due principally to the change in fair values of the aforementioned
ModCo derivatives as well as to the performance of inflation swaps taken
out by Hannover Re to partially hedge the inflation risk associated with
the loss reserves in its technical account. Write-downs of just EUR 21.7
million (EUR 31.0 million) had to be taken. Income from assets under own
management grew by 24.4% to EUR 1.3 billion (EUR 1.0 billion). Including
higher income from funds withheld and contract deposits, net investment
income surpassed the previous year's record level to reach EUR 1,655.7
million (EUR 1,384.0 million).
Shareholders' equity sharply higher
The equity attributable to shareholders of Hannover Re continued to develop
favourably; compared to the position as at 31 December 2011 it increased by
21.8% to EUR 6.1 billion (EUR 5.0 billion). The total policyholders'
surplus (including non-controlling interests and hybrid capital) grew by
22.3% to EUR 9.0 billion (EUR 7.3 billion). The improvement in the book
value per share was correspondingly pleasing, rising to EUR 50.22 (EUR
41.22). The return on equity amounted to 15.6%, after 12.8% in the previous
year.
Outlook for 2013
Hannover Re looks to the current financial year with optimism. The treaty
renewals as at 1 January 2013 in non-life reinsurance passed off
satisfactorily for the company despite growing competition. 'Thanks to our
comparatively low expense ratio and our long-standing good business
relations we are well equipped for the present competitive environment. The
key is maintaining a disciplined focus on writing business that meets our
margin requirements, while making allowance for the declining interest rate
level', Mr. Wallin stated.
As already announced, Hannover Re expects to be able to increase its gross
premium volume for the 2013 financial year by around 5% based on constant
exchange rates. Premium growth in non-life reinsurance should be in the
range of 3% to 5%, while in life and health reinsurance it is expected to
be in the region of 5% to 7%. The company is targeting a return on
investment of 3.4%.
Assuming that major loss expenditure does not significantly exceed the
anticipated level of EUR 625 million and provided there are no unexpectedly
adverse movements on capital markets, it remains Hannover Re's assumption
that Group net income for the 2013 financial year will be in the order of
EUR 800 million.
For the current financial year Hannover Re is targeting a dividend payout
ratio in the range of 35% to 40% of its post-tax IFRS Group net income.
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 EUR 13.8 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 2,300
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+ 'Superior').
Please note the disclaimer:
www.hannover-re.com/misc/disclaimer-pr-050811
Key figures of the Hannover Re Group (IFRS basis)
in EUR million 2012 +/- previous 20111) Including income/expense on funds withheld and contract deposits
year
Hannover Re Group
Gross written premium 13,774.2 +13.9% 12,096.1
Net premium earned 12,279.2 +14.2% 10,751.5
Net underwriting result (84.3) (535.8)
Net investment income 1) 1,655.7 +19.6% 1,384.0
Operating profit / loss (EBIT) 1,406.5 +67.2% 841.4
Group net income (loss) 858.3 +41.6% 606.0
Earnings per share in EUR 7.12 +41.6% 5.02
Retention 89.8% 91.2%
Tax ratio 28.3% 8.8%
EBIT margin 2) 11.5% 7.8%
Return on equity (after tax) 3) 15.6% 12.8%
in EUR million2012 +/- previous 2011
year
Policyholders' surplus 4) 8,973.3 +22.3% 7,338.2
Investments (excl. funds held by
ceding companies) 31,874.4 +12.5% 28,341.2
Total assets 54,811.7 +9.9% 49,867.0
Book value per share in EUR 50.22 +21.8% 41.22
Non-life reinsurance
in EUR million 2012 +/- previous 2011
year
Gross written premium 7,717.5 +13.1% 6,825.5
Net premium earned 6,854.0 +15.0% 5,960.8
Net underwriting result 272.2 (268.7)
Operating profit / loss (EBIT) 1,091.9 +82.2% 599.3
Group net income (loss) 685.9 +50.6% 455.6
Retention 90.2% 91.3%
Combined Ratio 5) 95.8% 104.3%
EBIT margin 2) 15.9% 10.1%
Life and health reinsurance
in EUR million 2012 +/- previous 2011
year
Gross written premium 6,057.9 +14.9% 5,270.1
Net premium earned 5,425.6 +13.3% 4,788.9
Operating profit / loss (EBIT) 291.1 +33.7% 217.6
Group net income (loss) 230.9 +26.7% 182.3
Retention 89.3% 91.0%
EBIT margin 2) 5.4% 4.5%
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
Key figures of the Hannover Re Group (IFRS basis)
in EUR million Q4/2012 +/- previous year Q4/20111) Including income/expense on funds withheld and contract deposits
Hannover Re Group
Gross written premium 3,478.3 +14.7% 3,031.4
Net premium earned 3,320.3 +15.6% 2,871.6
Net underwriting result (31.4) +74.4% (122.5)
Net investment income 1) 446.9 +3.1% 433.3
Operating profit / loss (EBIT) 389.7 +11.2% 350.6
Group net income (loss) 187.5 -16.4% 224.3
Earnings per share in EUR 1.56 -16.4% 1.86
Retention 90.1% 92.6%
Tax ratio 42.4% 23.7%
EBIT margin 2) 11.7% 12.2%
Return on equity (after tax) 3) 12.5% 18.6%
Non-life reinsurance
in EUR million Q4/2012 +/- previous year Q4/2011
Gross written premium 1,820.5 +13.4% 1,605.0
Net premium earned 1,836.5 +17.0% 1,569.6
Net underwriting result 102.5 (39.6)
Operating profit / loss (EBIT) 325.4 +22.2% 266.3
Group net income (loss) 160.9 +0.2% 160.6
Retention 90.9% 94.3%
Combined Ratio 4) 94.1% 102.3%
EBIT margin 2) 17.7% 17.0%
Life and health reinsurance
in EUR million Q4/2012 +/- previous year Q4/2011
Gross written premium 1,658.6 +16.3% 1,426.5
Net premium earned 1,484.1 +14.0% 1,302.0
Operating profit / loss (EBIT) 58.2 -26.3% 79.0
Group net income (loss) 42.6 -38.4% 69.1
Retention 89.3% 90.8%
EBIT margin 2) 3.9% 6.1%
2) Operating profit / loss (EBIT) / net premium earned
3) Annualised
4) Including interest income on contract deposits and funds withheld
End of Corporate News
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07.03.2013 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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203231 07.03.2013
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