Hannover Rueck SE · XETR:HNR1
Hannover Rueck — Hannover Re — FY2009 Earnings Presentation
38 slides from Hannover Rueck's earnings presentation, Mar 12, 2010
Slide 1: Welcome to Hannover Re's Analysts' Conference
Welcome to Hannover Re's Analysts' Conference Frankfurt/London, 12 March 2010
Slide 2: 2009 has been a successful year
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | 2009 has been a successful year Stable capital markets Favourable reinsurance markets Low catastrophe burdens Improved pricing in many reinsurance markets Very satisfying organic growth in att
Slide 3: 2009 with a pleasing top and bottom line
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | 2009 with a pleasing top and bottom line Group P/L figures at a glance in m. EUR 2008 Q1-3/2009 Q4/2009 2009 ∆ 09 vs. 08 Gross written premium 8,121 7,671 2,603 10,275 +26.5% Net premium earned 7,
Slide 4: Policyholders' surplus strengthened significantly in 2009
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Policyholders' surplus strengthened significantly in 2009 Increase of EUR 911 m. Policyholders' surplus in m. EUR 6.000 5,619 5,295 4,878 5.000 4,580 4,708 1,365 1,373 1,372 4.000 1,438 1,377 542
Slide 5: Highest book value per share ever
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Highest book value per share ever Year on year +31.2% Book value per share in EUR 40 11.48 32 30.78 27.77 9.18 11.48 24.03 23.47 24 7.58 20.93 21.57 19.57 7.58 30.41 6.58 17.76 17.21 17.90 5.63 3.
Slide 6: Profitability is well back on track
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Profitability is well back on track ROE minimum target achieved despite 3 years with low profit Return on Equity in % 0 26.0% 0 23.1% 22.4% 0 18.7% 17.1% 15.7% 0 13.3% 11.5% 11.7% 0 0 1.9% 0.7% 0
Slide 7: More than 750 bps above risk-free achieved
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | More than 750 bps above risk-free achieved Over 5, 10 and 15 years Return on Equity: average in % 0 0 14.0% 13.3% 12.4% 12.1% 11.2% 11.7% 0 0 0 5-year 5-year 10-year 10-year 15-year 15-year
Slide 8: Hannover Re consistently among most profitable reinsurers
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Hannover Re consistently among most profitable reinsurers Even on after-tax basis, in spite of strong Bermuda competition 2005 2006 2007 2008 2009 2005 - 2009 Company RoE Rank RoE Rank RoE Rank Ro
Slide 9: Well balanced international portfolio
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Well balanced international portfolio . . .even after ING Life Re acquisition GWP 2008 in % GWP 2009 in % Australia Australia Africa Latin Africa 5% 4% Latin 3% America 4% America North 6% North 5
Slide 10: Strong premium growth in all geographical areas
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Strong premium growth in all geographical areas Growth GWP 2009 vs. 2008 in m. EUR Group Group 759 561 834 +26.5% North America 181 119 834 +52.7% Great Britain 123 233 +16.5% Latin America 184 2
Slide 11: All time high result including one-offs
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | All time high result including one-offs Earnings per share excluding one-offs: EUR 4.97 EBIT in m. EUR One-off effects 1.200 1,140 (all related to life and health reinsurance) 142 EBIT: EUR 142.
Slide 12: 2009: mid-term targets achieved
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | 2009: mid-term targets achieved Strategic Business group Key figures targets 2009 2009 Non-life R/I Gross-premium growth (y-o-y) none 15.2% Combined ratio - assuming a < 100%1) 96.6% net cat.-lo
Slide 13: Non-life reinsurance with strong profit contribution in 2009
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Non-life reinsurance with strong profit contribution in 2009 P/L figures at a glance Non-life reinsurance Premium growth 15.2% gross 2008 Q4/2009 2009 and 22.3% net due to in m. EUR increased de
Slide 14: Non-life reinsurance: well diversified portfolio
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Non-life reinsurance: well diversified portfolio Divisions in % Regional split in % Global cat. Africa Global R/I XL France 4% Australia 5% North Global 6% 2% America North facultative 15% Target
Slide 15: All divisions show strong growth in premium and profits
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | All divisions show strong growth in premium and profits Non-life reinsurance in m. EUR 2008 2009 Δ 09 vs. 08 Target markets Gross written premium 1,586.3 1,737.9 +9.6% Operating profit/loss (EBIT)
Slide 16: 2009 large losses below expected losses
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | 2009 large losses below expected losses Natural and man-made catastrophe losses1) in m. EUR 2,373 1.000 1,775 1,070 800 775 665 672 600 472 458 410 450 400 370 377 291 285 240 225 200 164 121 107
Slide 17: Major losses: high frequency, low severity
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Major losses: high frequency, low severity Catastrophe loss* in m. EUR Date Gross Net Winter storm "Klaus" 23 - 25 Jan 34.9 33.8 Bushfire Australia 5 - 17 Feb 38.2 34.7 Earthquake Italy 6 Apr 11.3
Slide 18: Strong organic performance plus acquisition
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Strong organic performance plus acquisition Life and health reinsurance Premium growth 44.5% gross and 46.5% net due to good in m. EUR 2008 Q4/2009 2009 opportunities in US and UK and Gross writ
Slide 19: Growth drivers of life and health reinsurance
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Growth drivers of life and health reinsurance Growing middle class in emerging markets and demographic effects due to aging societies in mature markets First-mover advantage and a sound market
Slide 20: Life and health reinsurance moving towards 50% share
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Life and health reinsurance moving towards 50% share Gross written premium in m. EUR 12.000 10.000 10,275 9,317 8,320 8.000 26% 44% 25% 6.000 4.000 3,067 2,135 11% 2.000 6% 0 1990 1995 2000 2005 2
Slide 21: Life and health reinsurance: well diversified portfolio
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Life and health reinsurance: well diversified portfolio 5 strategic pillars in % Regional split in % Financial Latin France Africa America Solutions 3% 3% 9% Asia 2% Banc- 5% assurance Australia N
Slide 22: 2009: strong increase investment volume
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | 2009: strong increase investment volume Investment income at expected level Total investments in m. EUR Investment income in m. EUR 40.000 1.400 34,722 35.000 1,189 1.200 1,116 1,122 1,120 28,786
Slide 23: Return on investment at 4.0%
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Return on investment at 4.0% Excluding one-off effects: 3.6% Previous year with large in m. EUR 2008 2009 Δ 09 vs. 08 realised losses and high Ordinary investment income1) 834 806 -3.4% impairme
Slide 24: Positive cashflow generates stable growth
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Positive cashflow generates stable growth Assets under own management* in m. EUR (10,737) (143) 12,872 24 163 7 2,187 (21) 204 22,507 20,137 20,341 Balance 31 f/x Balance 1 Additions Disposal Amor
Slide 25: Conservative approach unchanged
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Conservative approach unchanged Fixed income portfolio: duration (3.7) matched to operative business Tactical Asset Allocation Investment category 2005 2006 2007 2008 2009 Fixed-income securities
Slide 26: Focus on high quality securities
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Focus on high quality securities Fixed-income portfolio in m. EUR 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ,0 2005 2006 2007 2008 2009 AAA AA A BBB <BBB S&P financial st
Slide 27: Fixed-income book well balanced
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Fixed-income book well balanced 75% invested in AA or better Pfandbriefe, Semi- Governmentals Corporates Covered Bonds, Total governmentals ABS AAA 84.5% 56.7% 4.4% 75.4% 54.7% AA 5.7% 38.9% 18.4%
Slide 28: Outlook on 2010
hannover re’ Outlook on 2010
Slide 29: The growth continues
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | The growth continues Guidance for 2010 Hannover Re Group • Gross written premium (GWP)1) +~5% • Net premium earned (NPE)1) +~5% Non-life reinsurance (NPE)1) +~4% Life and health reinsurance
Slide 30: Hannover Re: a superior and highly profitable reinsurer
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Hannover Re: a superior and highly profitable reinsurer. . . . . .with a somewhat different approach Strong market positioning – one of the leading reinsurers worldwide Top rating (S&P: AA-) e
Slide 31: Appendix
hannover re’ Appendix
Slide 32: Our strategic business groups at a glance
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Our strategic business groups at a glance Non-life Life and health Consolidation Total reinsurance reinsurance in m. EUR 2008 2009 2008 2009 2008 2009 2008 2009 Gross written premium 4,988 5,747 3
Slide 33: Realised gains versus impairments by asset class
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Realised gains versus impairments by asset class Realised gains/ Impairments/ Realised gains/ Impairments/ losses Appreciation losses Appreciation in m. EUR 2008 2009 Fixed-income securities 85.5
Slide 34: Fixed-income book well balanced
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Fixed-income book well balanced Allocation according to our operational diversification Pfandbriefe, Short-term Governmentals Semi-governmentals Corporates Covered Bonds, investments, cash ABS Ger
Slide 35: Asset allocation
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Asset allocation Reflects market spectrum Corporate sector allocation in % Others Others 6% 2% Insurance 22% Publicly Industrials guaranteed 43% Financials 4% 51% Banks covering all activites 62%
Slide 36: Asset allocation
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Asset allocation Focus on balanced risk return ratio Corporates by currency and rating in % <BBB AAA AAA <BBB AA AA BBB 2% 8% <BBB 1% 10% 13% 4% 3% 15% BBB 20% BBB 19% A 49% AA 38% A A 61% 57% EUR
Slide 37: No material subordinated exposure
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | No material subordinated exposure Merely 2% of fixed-income securities are subordinated Asset allocation in % Participating Participating certificates according to certificates / German law & "P
Slide 38: Stress tests
Group | Non-life reinsurance | Life and health reinsurance | Investments | Outlook on 2010 | Appendix | Stress tests Change in market value Changes in OCI before tax Portfolio Scenario in m. EUR in m. EUR Equities Prices -10% -2 -2 Equities Prices -20% -4 -4 Equities Prices -30% -6 -6 Fixed-income s