DGAP-News: Hannover Re generates record result in 2010
(firmenpresse) - DGAP-News: Hannover Rückversicherung AG / Key word(s): Final Results
Hannover Re generates record result in 2010
09.03.2011 / 07:45
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Hannover Re generates record result in 2010
- Overall premium growth +11.2%
- Combined ratio in non-life reinsurance: 98.2% (96.6%)
- Net expenditure on major claims: EUR 661.9 million (EUR 239.7 million)
- Investment income improves to EUR 1.3 billion (EUR 1.1 billion)
- Operating profit (EBIT): EUR 1.2 billion (EUR 1.1 billion)
- Group net income: EUR 748.9 million (EUR 733.7 million)
- Earnings per share: EUR 6.21 (EUR 6.08)
- Return on equity: 18.2%
- Increased dividend proposal for 2010: EUR 2.30 (EUR 2.10)
Hannover, 9 March 2011: The 2010 financial year was a very pleasing one for
Hannover Re. 'With net income after tax of EUR 748.9 million we beat our
record result of 2009', Chief Executive Officer Ulrich Wallin noted.
Although operational business was impacted by a heavy major loss incidence,
the resulting strains were more than offset by lower basic losses and very
healthy investment income as well as a positive special effect associated
with a decision of the Federal Fiscal Court.
2010 financial year
The gross written premium booked by the Hannover Re Group showed another
sharp increase of 11.2% - after vigorous growth in the previous year - to
reach EUR 11.4 billion (EUR 10.3 billion). At constant exchange rates the
premium volume would have risen by 6.8%. The level of retained premium
retreated slightly to 90.1% (92.6%). Net premium earned climbed 7.9% to
EUR 10.0 billion (EUR 9.3 billion).
The operating profit (EBIT) improved to EUR 1.2 billion (EUR 1.1 billion).
The previous year had been influenced by positive special effects in life
and health reinsurance amounting to EUR 144.7 million. Group net income
increased from EUR 733.7 million to EUR 748.9 million. This figure already
includes a charge of EUR 69.2 million from the sale of the company's US
subsidiary Clarendon. The result benefited in an amount of EUR 112.2
million on balance from a positive special effect associated with the
decision of the Federal Fiscal Court regarding the taxation of foreign
sourced income. Yet even without this effect the result would have
surpassed the original profit forecast for 2010. Earnings per share stood
at EUR 6.21 (EUR 6.08).
In the light of this healthy profitability the shareholders' equity of
Hannover Re improved by more than 21.4% on the level as at 31.12.2009 to
reach EUR 4.5 billion (EUR 3.7 billion). The policyholders' surplus
(including minority interests and hybrid capital) climbed by 24.3% to EUR
7.0 billion (EUR 5.6 billion). The return on equity amounted to 18.2%
(22.4%) and thus comfortably surpassed the guidance of 15%.
Non-life reinsurance delivers very good profit contribution despite heavy
major loss expenditure
'Even though the competitive pressure in non-life reinsurance intensified,
we are still satisfied with the development of our operational business.
Prices and conditions were for the most part preserved on a stable level
thanks to the largely disciplined underwriting practice among reinsurers',
Mr. Wallin stressed.
Gross written premium in the non-life reinsurance business group increased
as expected by 10.3% to EUR 6.3 billion (EUR 5.7 billion). At constant
exchange rates - especially against the US dollar - growth would have come
in at 6.7%. The level of retained premium fell to 88.9% (94.1%). Net
premium earned climbed by 3.1% to EUR 5.4 billion (EUR 5.2 billion).
The situation as regards major claims was extremely strained in 2010,
causing total net expenditure of EUR 661.9 million (EUR 239.7 million) for
Hannover Re; the expected level had been around EUR 500 million.
Three severe earthquakes dominated the year under review: the largest
single event for Hannover Re was the earthquake in Chile with a net loss
burden of EUR 181.9 million. The earthquake in New Zealand gave rise to net
loss expenditure of EUR 113.8 million. On account of lower insured values
in Haiti the loss amount here was relatively moderate at EUR 27.2 million.
Also noteworthy were winter storm 'Xynthia' in Europe, numerous flood
events in various parts of the world and the loss of the 'Deepwater
Horizon' drilling rig in the Gulf of Mexico.
Despite the heavy burden of major losses the combined ratio increased only
modestly from 96.6% to 98.2%. The underwriting result for non-life
reinsurance contracted accordingly by 42.6% to EUR 82.4 million (EUR 143.5
million). The operating profit (EBIT) climbed to EUR 879.6 million (EUR
731.4 million). Group net income in the non-life reinsurance business group
surged by an appreciable 22.9% to EUR 581.0 million (EUR 472.6 million).
Earnings per share amounted to EUR 4.82 (EUR 3.92).
Life and health reinsurance books further substantial growth
'We again accomplished our growth targets in 2010', Mr. Wallin emphasised.
'This was assisted by the very positive development of our business in the
United Kingdom, most notably in the area of longevity risks.' Particularly
vigorous growth was also recorded in China, where Hannover Re was the first
reinsurer to write liquidity-affecting financing contracts.
Gross written premium in life and health reinsurance increased by 12.4% to
EUR 5.1 billion (EUR 4.5 billion) in the year under review. At constant
exchange rates growth would have amounted to 6.8%. Net premium earned
surged by 14.1% to EUR 4.7 billion (EUR 4.1 billion). The life and health
reinsurance business group now contributes 44.5% of Hannover Re's total
premium volume.
The operating profit (EBIT) in life and health reinsurance declined to EUR
284.4 million (EUR 374.7 million). EBIT would have grown by 24% if positive
special effects in the previous year associated with the acquisition of the
US ING life reinsurance portfolio as well as fair value adjustments were
factored out. The EBIT margin of 6.1% was in line with expectations. Group
net income in life and health reinsurance totalled EUR 219.6 million (EUR
298.1 million); earnings per share came in at EUR 1.82 (EUR 2.47).
Very good investment income
The portfolio of assets under own management grew substantially to EUR 25.4
billion (EUR 22.5 billion) on the back of positive cash inflows from the
technical account and changes in fair values. Even though interest rate
levels were lower overall, ordinary investment income therefore surpassed
the previous year (EUR 810.5 million) to reach EUR 880.5 million.
Income from investments under own management increased by 11.7% to EUR
942.5 million (EUR 843.6 million). Including income on funds withheld and
contract deposits, net investment income totalled EUR 1.3 billion (EUR 1.1
billion). The return on investment stood at 3.9% (4.0%).
In the third quarter of 2010 Hannover Re began to move back into listed
equities with a limited budget. The equity allocation at year-end was 2.1%.
Increased dividend proposal for 2010: EUR 2.30
'In view of our gratifying Group net income and our dividend policy of
paying out 35% to 40% of our profit, the Executive Board and Supervisory
Board will propose to the Annual General Meeting that the dividend should
be increased by EUR 0.20 relative to the previous year to an amount of EUR
2.30 per share', Mr. Wallin stated.
Outlook for 2011
Hannover Re is optimistic about the prospects for the current financial
year. The treaty renewals as at 1 January 2011 in non-life reinsurancepassed off better than expected. The company anticipates premium growth of
up to 3% and a good profit contribution for the current financial year. In
2011 Hannover Re will again concentrate - in keeping with its strategy of
active cycle management - on segments in which adequate premiums can be
obtained or prices are rising. The more exacting requirements for risk
capital at insurance companies (Solvency II), for whom the transfer of risk
to reinsurers with good ratings offers an economically attractive
alternative, are expected to open up potential growth opportunities.
In life and health reinsurance the company is looking to generate growth of
10% to 12% in net premium. In developed insurance markets such as the
United States, United Kingdom and Germany the ageing of the population
should lead to stronger demand, especially for annuity and health insurance
products. Progressive urbanisation in major emerging markets such as China,
India and Brazil is producing a rapidly expanding middle class with an
increasing need for insurance solutions.
For 2011 Hannover Re anticipates a return on investment of around 3.5%.
Hannover Re is looking to generate a good result for the full 2011
financial year. 'Assuming that the burden of major losses does not
significantly exceed the anticipated level of roughly EUR 530 million and
provided there are no drastically adverse movements on capital markets, we
continue to expect Group net income in the order of EUR 650 million for the
current year', Mr. Wallin stated. Hannover Re stands by its targeted payout
ratio in the range of 35% to 40% of 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:
Klaus Paesler (tel. +49 511 5604-1736,
e-mail: klaus.paesler(at)hannover-re.com)
Please visit: www.hannover-re.com
Hannover Re, with a gross premium of around EUR 11 billion, is the
third-largest reinsurer in the world. It transacts all lines of non-life
and life and health reinsurance. It maintains business relations with more
than 5,000 insurance companies in about 150 countries. Its worldwide
network consists of more than 100 subsidiaries, branch and representative
offices on all five continents with a total staff of roughly 2,200. 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').
Disclaimer:
Some of the statements in this press release may be forward-looking
statements or statements of future expectations based on currently
available information. Such statements are naturally 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. Hannover Re does not make any representation or warranty,
express or implied, as to the accuracy, completeness or updated status of
such statements. Therefore, in no case whatsoever will Hannover Re and its
affiliate companies be liable to anyone for any decision made or action
taken in conjunction with the information and/or statements in this press
release or for any related damages.
Key figures of the Hannover Re Group (IFRS basis) for the full 2010
financial year
in EUR million 2010 20091) +/- previous year
Gross written premium 11,428.7 10,274.8 +11.2%
Net premium earned 10,047.0 9,307.2 +7.9%
Net underwriting result (185,1) (100.4) +84.3%
Net investment income2) 1,258.9 1,120.4 +12.4%
Operating profit / loss (EBIT) 1,173.8 1,142.5 +2.7%
Group net income (loss) 748.9733.7 +2.1%
Earnings per share in EUR 6.21 6.08 +2.1%
Retention 90.1% 92.6%
EBIT margin4) 11.7% 12.3%
Return on equity (after tax) 18.2% 22.4%
in EUR million 2010 20091) +/- previousNon-life reinsurance
year
Policyholders' surplus3) 6,987.0 5,621.6 +24.3%
Investments (excl. funds held by ceding 25,411 22,507
companies) .1 .0 +12.9%
46,725 40,837
Total assets .3 .6 +14.4%
Book value per share in EUR 37.39 30.80 +21.4%
in EUR million 2010 20091) +/- previous yearLife and health reinsurance
Gross written premium 6,339.3 5,746.6 +10.3%
Net premium earned 5,393.9 5,229.5 +3.1%
Net underwriting result 82.4 143.5 -42.6%
Operating profit / loss (EBIT) 879.6 731.4 +20.3%
Group net income (loss) 581.0 472.6 +22.9%
Retention 88.9% 94.1%
Combined Ratio5) 98.2% 96.6%
EBIT margin4) 16.3% 14.0%
in EUR million 2010 20091) +/- previous year1) Figures adjusted in connection with the acquisition of the ING life
Gross written premium 5,090.1 4,529.3 +12.4%
Net premium earned 4,653.9 4,078.7 +14.1%
Operating profit / loss (EBIT) 284.4 374.7 -24.1%
Group net income (loss) 219.6 298.1 -26.3%
Retention 91.7% 90.7%
EBIT margin4) 6.1% 9.2%
reinsurance portfolio
2) Including expense on funds withheld and contract deposits
3) Total shareholders' equity + minority interests + hybrid capital
4) Operating profit / loss (EBIT) / net premium earned
5) Including interest income on contract deposits and funds withheld
Key figures of the Hannover Re Group (IFRS basis) for Q4/2010
in EUR million Q4/2010 Q4/20091) +/- previous yearNon-life reinsurance
Gross written premium 2,874.1 2,603.3 +10.4%
Net premium earned 2,575.8 2,580.8 -0.2%
Net underwriting result (32.1) (16.5) +94.8%
Net investment income2) 386.7 269.9 +43.3%
Operating profit / loss (EBIT) 311.8 290.7 +7.3%
Group net income (loss) 166.9 137.1 +21.7%
Earnings per share in EUR 1.38 1.13 +21.7%
Retention 87.6% 93.6%
EBIT margin4) 12.1% 11.3%
Return on equity (after tax)5) 14.9% 15.1%
in EUR million Q4/2010 Q4/20091) +/- previous yearLife and health reinsurance
Gross written premium 1,514.4 1,341.4 +12.9%
Net premium earned 1,327.1 1,464.1 -9.4%
Net underwriting result 50.0 45.4 +10.0%
Operating profit / loss (EBIT) 246.2 254.4 -3.2%
Group net income (loss) 143.3 141.3 +1.5%
Retention 83.6% 96.5%
Combined Ratio6) 95.9% 95.9%
EBIT margin4) 18.5% 17.4%
in EUR million Q4/2010 Q4/20091) +/- previous year1) Figures adjusted in connection with the acquisition of the ING life
Gross written premium 1,359.8 1,263.0 +7.7%
Net premium earned 1,249.0 1,117.7 +11.7%
Operating profit / loss (EBIT) 70.7 36.4 +94.3%
Group net income (loss) 49.4 18.2 +171.4%
Retention 92.1% 90.4%
EBIT margin4) 5.7% 3.3%
reinsurance portfolio
2) Including expense on funds withheld and contract deposits
3) Total shareholders' equity + minority interests + hybrid capital
4) Operating profit / loss (EBIT) / net premium earned
5) Annualised
6) Including interest income on contract deposits and funds withheld
End of Corporate News
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Language: English
Company: Hannover Rückversicherung AG
Karl-Wiechert-Allee 50
30625 Hannover
Deutschland
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
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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Datum: 09.03.2011 - 07:45 Uhr
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