Hannover Re presents very pleasing interim result
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ Hannover Re presents very pleasing interim result* Gross premium + 25.6% on the back of stronger demand and ING acquisition* Net premium + 30.3% due to increased retention* Net investment income + 129.6%* Group net income EUR 578.4 million* Moderate burden of catastrophe losses* Combined ratio 96.8%* EBIT margin comfortably beats target* Profit target for 2009 raised to at least EUR 5.75 per share* Dividend of at least EUR 2 envisaged for 2009Hannover, 6 November 2009: In its interim report presented todayHannover Re expressed considerable satisfaction with the developmentof its business. "With our result for the third quarter we havesecured a very good foundation and are in a position to raise ourprofit target for the full financial year. We now anticipate earningsof at least EUR 5.75 a share and are looking to pay a dividend of atleast EUR 2 per share", Chief Executive Officer Ulrich Wallinexplained.The operating profit (EBIT) as at 30 September 2009 improvedsubstantially year-on-year to reach EUR 844.8 million. Group netincome surged - in part due to various special effects in life andhealth reinsurance - by EUR 721.2 million to EUR 578.4 million. Theresult for the corresponding period of the previous year had beennegative (-EUR 142.8 million) owing to heavy write-downs taken onequities because of the turmoil prevailing on capital markets at thetime. Earnings of EUR 4.80 (-EUR 1.18) a share were generated; theannualised return on equity stood at 24.2% (-6.4%).Gross written premium in total business rose by 25.6% to EUR7.7 billion (EUR 6.1 billion) as at 30 September 2009. This includesEUR 606.4 million from the acquisition of the ING life reinsuranceportfolio. Exchange-rate effects did not play a significant role.With the level of retained premium increasing to 92.3% (88.8%), netpremium earned climbed by an even stronger 30.3% to EUR 6.7 billion(EUR 5.2 billion).The development of shareholders' equity, which improved by 24.9% onthe level as at 31 December 2008 to EUR 3.5 billion (EUR2.8 billion), was especially gratifying. The policyholders' surplus,comprised of shareholders' equity, minority interests and hybridcapital, increased from EUR 4.7 billion to EUR 5.4 billion.Hannover Re was highly satisfied with the development of its non-lifereinsurance. The situation on the international reinsurance marketsremains positive. The effects of the financial market crisis havehighlighted particularly forcefully the attraction of reinsurance asa capital management tool, especially in cash-intensive segments.Demand for reinsurance protection has consequently risen in numeroussegments. The industry summits in Monte Carlo, Baden-Baden and theUnited States underscored this trend.Capacities contracted sharply in credit and surety insurance inresponse to higher loss ratios triggered by the financial marketcrisis. Hannover Re made the most of the associated significant pricerises and selectively enlarged its portfolio. Even though the resultonly reached break-even as at 30 September 2009 owing to increaseddefault rates and prudent reserving, the company sees the improvingloss ratios as confirmation of its strategy and expects the writtencredit and surety business to return to profitability in 2010.Business in Central and Eastern Europe, where the company enlargedits portfolio, is faring well. Stronger demand in the area ofstructured covers continues to open up highly attractiveopportunities.Gross premium in non-life reinsurance as at 30 September 2009improved on the comparable period of the previous year by 16.2% toEUR 4.4 billion (EUR 3.8 billion). At constant exchange rates,especially against the US dollar, the increase would have been 13.0%.The retention climbed to 93.4% (88.4%) due to substantially reducedretrocessions. Net premium earned consequently rose by an impressive21.3% to EUR 3.8 billion (EUR 3.1 billion).In light of an unremarkable hurricane season the burden ofcatastrophe losses in the third quarter was below average. Hail andflood damage in Central Europe, an industrial fire claim in Russia aswell as a loss event in marine business led to expenditure in theorder of EUR 35 million. All in all, the total net burden ofcatastrophe losses and major claims in the period until 30 September2009 stood at EUR 198.2 million (EUR 444.9 million). This isequivalent to 5.3% of net premium in non-life reinsurance and hencecomfortably below the expected level. The combined ratio amounted to96.8% (103.6%).The net underwriting result in non-life reinsurance improved from-EUR 131.2 million in the comparable period of the previous year toEUR 98.1 million. The operating profit (EBIT) increased to EUR477.0 million (-EUR 86.0 million). Group net income climbed to a verygood EUR 331.3 million (-EUR 178.0 million), producing earnings ofEUR 2.75 (-EUR 1.48) a share.Hannover Re is very pleased with the development of its life andhealth reinsurance business. Owing to a visibly weaker solvencyposition insurers are adopting a considerably more cautious riskstrategy and financial policy, hence leading to an increased clamourfor both risk- and financially oriented products. This state ofaffairs was particularly evident in the United States, where theinsurance industry suffered marked erosion of its capital base."Block assumption transactions, i.e. the assumption of definedin-force portfolios, also currently offer favourable opportunitieswhich we again used in the third quarter to expand our business", Mr.Wallin explained.Driven by the acquisition of the ING life reinsurance portfolio andvigorous organic growth, gross written premium as at30 September 2009 surged by a substantial 41.1% to EUR 3.3 billion(EUR 2.3 billion). At constant exchange rates the increase would havebeen 43.2%. The retention climbed from 89.3% to 90.8%. Net premiumearned rose by 43.8% to EUR 3.0 billion (EUR 2.1 billion).Net investment income in life and health reinsurance was doubled fromEUR 206.3 million to EUR 433.5 million. Positive special effectsresulting from the reversal of unrealised losses on deposits with USclients were again a factor here in the third quarter. The operatingprofit (EBIT) therefore improved considerably to EUR 331.4 million(EUR 93.2 million). The EBIT margin of 11.2% consequently surpassedthe target corridor of 6.5% to 7.5%. Group net income climbed to EUR261.7 million (EUR 61.4 million), producing earnings of EUR 2.17 (EUR0.51) a share.Investments developed satisfactorily for the Group as a whole in thefirst nine months. The portfolio of assets under own managementimproved on the volume as at 31 December 2008, growing to EUR21.7 billion (EUR 20.1 billion) thanks largely to a positiveoperating cash flow. Despite significantly lower interest rates,ordinary income excluding interest on deposits fell just slightlyshort of the value in the corresponding period of the previous yearat EUR 603.8 million (EUR 627.5 million) - a testament to the factthat Hannover Re is correct in pursuing an investment policy gearedto generating stable ordinary income.The balance of realised gains and losses totalled EUR 67.9 million asat 30 September 2009, as against EUR 77.0 million in the comparableperiod of the previous year. Along with impairments taken onfixed-income securities of EUR 35.2 million, the volume ofwrite-downs totalling altogether EUR 110.3 million (EUR433.0 million) was due in large measure (EUR 70.8 million) toalternative investments; of this amount, EUR 47.5 million wasattributable to private equity. Unrealised gains on asset holdingsmeasured at fair value through profit or loss amounted to EUR135.4 million. This contrasted with unrealised losses of EUR33.4 million in the corresponding period of the previous year. Thispositive development resulted chiefly from the reversal of unrealisedlosses on securities deposits held for the account of Hannover Re byUS clients.Assisted first and foremost by the improvement in unrealised gainsand a significantly reduced volume of write-downs, the net investmentincome climbed very strongly to EUR 850.5 million (EUR 370.4million).OutlookHannover Re anticipates a pleasing result for 2009 in both non-lifeand life/health reinsurance. At constant exchange rates the companyexpects the net premium volume to grow by around 30%.In non-life reinsurance the markets present a very satisfactorypicture overall. The price level is broadly commensurate with therisks, although in some segments - for example US casualty business -further rate increases are needed. Owing to an above-average claimsdevelopment in the aviation segment in the year under review, higherprices can be obtained for both loss-affected and loss-freeprogrammes in the currently ongoing round of treaty renewals. Thecompany sees attractive business opportunities in the area ofstructured covers, especially with an eye to the likely implicationsof Solvency II.Net premium in non-life reinsurance should show growth of around 20%by year-end. Provided the burden of catastrophe losses and majorclaims continues to remain within the anticipated bounds, a veryhealthy profit contribution can be expected.The fundamental business climate in life and health reinsurance isalso positive. Here, too, the financial and economic crisis hasprompted stronger demand for reinsurance and hence provided growthstimuli.Owing to the acquisition of the ING life reinsurance portfolioeffective 1 January 2009, Hannover Re expects the net premium volumeto rise by around 40%. All in all, the life and health reinsurancebusiness group should also deliver a very good profit contribution tototal business.On the investments side the anticipated positive cash flow should -subject to stable exchange rates - result in further growth in theasset holdings. In the area of fixed-income securities the companycontinues to stress the high quality and diversification of itsportfolio. "We shall only consider investing in equities again in amore stable market climate", Mr. Wallin emphasised.In light of its strategic orientation and the available marketopportunities in non-life and life/health reinsurance, Hannover Reexpects to post a very good result for the 2009 financial year.Assuming that the burden of catastrophe losses and major claims doesnot significantly exceed the expected level innon-life reinsurance, and as long as there are no adverse movementson capital markets, Hannover Re expects - allowing for thenon-recurring effect from the acquisition of the ING life reinsuranceportfolio - a return on equity in excess of 20% and earnings pershare of at least EUR 5.75 for the 2009 financial year. The company'sgoal is to pay a dividend in the order of at least EUR 2.For further information please contact:Press and Public Relations / Investor Relations:Stefan Schulz (tel. +49 511 5604-1500,e-mail: stefan.schulz(at)hannover-re.com)Press and Public 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.comHannover Re, with a gross premium of around EUR 9 billion, is one ofthe leading reinsurance groups in the world. It transacts all linesof non-life and life and health reinsurance. It maintains businessrelations with more than 5,000 insurance companies in about 150countries. Its worldwide network consists of more than 100subsidiaries, branch and representative offices on all fivecontinents with a total staff of roughly 2,000. The rating agenciesmost relevant to the insurance industry have awarded Hannover Re verystrong 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 beforward-looking statements or statements of future expectations basedon currently available information. Such statements are naturallysubject to risks and uncertainties. Factors such as the developmentof general economic conditions, future market conditions, unusualcatastrophic loss events, changes in the capital markets and othercircumstances may cause the actual events or results to be materiallydifferent from those anticipated by such statements. Hannover Re doesnot make any representation or warranty, express or implied, as tothe accuracy, completeness or updated status of such statements.Therefore, in no case whatsoever will Hannover Re and its affiliatecompanies be liable to anyone for any decision made or action takenin conjunction with the information and/or statements in this pressrelease or for any related damages.http://hugin.info/130686/R/1352967/327596.pdf --- End of Message ---Hannover RückKarl-Wiechert-Allee 50 Hannover GermanyWKN: 840221; ISIN: DE0008402215; Index: CDAX, CLASSIC All Share, HDAX, MDAX, MIDCAP, Prime All Share;Listed: Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Börse Berlin, Freiverkehr in Börse Düsseldorf, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Bayerische Börse München, Freiverkehr in Börse Stuttgart, Regulierter Markt in Niedersächsische Börse zu Hannover, Regulierter Markt in Frankfurter Wertpapierbörse;
Datum: 06.11.2009 - 07:30 Uhr
Sprache: Deutsch
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