Hannover Rueck Se · XETR:HNR1
Hannover Rueck — Hannover Re — Investor Presentation (April 2024)
90 slides from Hannover Rueck's investor presentation, April 2024
Slide 1: Hannover Re: the somewhat different reinsurer
Hannover Re: the somewhat different reinsurer April 2024
Slide 2: Agenda
Agenda 1 Hannover Re Group 1.1 Equity Story 2 1.2 Positioning in the reinsurance market 4 1.3 About us 9 1.4 Sustainability 29 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2
Slide 3: Why to invest in Hannover Re…
| 1 | 1.1 Equity Story | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Why to invest in Hannover Re… Excellent market position and very strong capitalisation Delivering high and • Leading reinsurer with worldwide presence sustainable profitability • Very strong capitalisation according to Solvency II and S&P rati
Slide 4: Agenda
Agenda 1 Hannover Re Group 1.1 Equity Story 2 1.2 Positioning in the reinsurance market 4 1.3 About us 9 1.4 Sustainability 29 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2
Slide 5: Reinsurance has the character of a specialty market
| 1 | 1.2 Positioning in the reinsurance market | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Reinsurance has the character of a specialty market With a share of 8% of the overall insurance market Market size primary insurance vs. reinsurance Global insurance premium ~ EUR 4.5 trillion Global reinsurance premiu
Slide 6: Growing Property and Casualty reinsurance market, Hannover Re outperforms the market
| 1 | 1.2 Positioning in the reinsurance market | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Growing Property and Casualty reinsurance market Hannover Re outperforms the market Market size and concentration 2022 GWP in bn. EUR Market share 2022 Hannover Re Top 10 Other Top 10 • Low market entry barriers 67 % 2
Slide 7: Life and Health reinsurance in a global perspective
| 1 | 1.2 Positioning in the reinsurance market | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Life and Health reinsurance in a global perspective Concentrated market due to high entry barriers Market size and concentration 2022 GWP in bn. EUR Market share 2022 Hannover Re Top 7 Other Other 16% Top 7 • High mark
Slide 8: Reinsurance is and will be an attractive product
| 1 | 1.2 Positioning in the reinsurance market | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Reinsurance is and will be an attractive product Drivers for reinsurance demand Trends, conditions and expectations Value Proposition of reinsurance Global trends • Protection gap • Demographic change Strong capital ba
Slide 9: Agenda
Agenda 1 Hannover Re Group 1.1 Equity Story 2 1.2 Positioning in the reinsurance market 4 1.3 About us 9 1.4 Sustainability 29 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2
Slide 10: Purpose & Values
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Purpose & Values The “why” and the “how” articulate our distinctive corporate culture Our self-conception Our values Purpose Why do we do what we do? We are ambitious - We are open-minded for our clients’ success and give things a try Core values
Slide 11: Hannover Re: the somewhat different reinsurer
11 11 Hannover Re: the somewhat different reinsurer
Slide 12: Financial ambition 2024 - 2026
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Financial ambition 2024 - 2026 Increasing earnings will support continued dividend growth Staying Focused. Thinking Ahead. Industry-leading performance > 14% > 5% Focus Return on Equity EBIT growth Grow Economic value creation, capital strength &
Slide 13: One of the world’s leading reinsurers
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | One of the world’s leading reinsurers Key facts about Hannover Re Founded >3,500 by HDI (P&C Total staff of reinsurance only) in 1966 employees Initial Public Worldwide presence with Offering of subsidiaries and Hannover Re in branches on all 1994
Slide 14: Present on all continents
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Present on all continents Europe Madrid Dublin London Paris Hannover Milan Stockholm The Americas Asia Manama Toronto Seoul Chicago Tokyo Denver Orlando Taipei Hamilton Shanghai Hong Kong Mexico City Mumbai Bogotá Africa Australia Kuala Lumpur Rio
Slide 15: Group structure supports our business model
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Group structure supports our business model Free float Talanx AG1) 49.8% 50.2% 64.8% 8 German >170 subsidiaries, primary insurers branch/rep. 35.1% offices worldwide Domestic business International business 1) Majority shareholder HDI V.a.G. 15 Ha
Slide 16: Executive Board of Hannover Rück SE
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Executive Board of Hannover Rück SE Jean-Jacques Henchoz Clemens Jungsthöfel Chief Executive Officer Chief Financial Officer Group Operations and Strategy, Information Technology, Facility Asset Management, Reinsurance Management, Human Resources
Slide 17: We are among the top reinsurers in the world
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | We are among the top reinsurers in the world Premium ranking 2022 Rank Group Country GWP NPW 1 Munich Re DE 51,331 48,550 2 Swiss Re CH 39,749 37,302 3 Hannover Re1) DE 35,528 29,672 4 Canada Life Re CA 23,414 23,414 5 Berkshire Hathaway Inc. 2) U
Slide 18: Long-term track record of favourable growth
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Long-term track record of favourable growth Gross written premium Reinsurance revenue 33.3 27.8 31% 24.8 24.5 24.0 22.6 32% Transition 19.2 35% from IFRS 4 31% to IFRS 17 32% 17.8 17.1 38% accounting 16.4 14.4 40% 44% 45% 45% 69% 44% 68% 65% 68% 6
Slide 19: Well-balanced international portfolio
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Well-balanced international portfolio 2023: Reinsurance revenue split by regions 2023: Reinsurance revenue split by line of business France Africa 16,824 Other 3.3% 1.9% Credit, Surety and Political Risks 795 4.5% 657 Agricultural Risks Australia
Slide 20: Low cost ratio remains an important competitive advantage
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Low cost ratio remains an important competitive advantage Cost ratio for financial year 2023 at 3.3% Lean operating model based on • IFRS 17 directly attributable expenses are 739 739 lower than IFRS 4 administrative expenses Other 20% expenses 55
Slide 21: Long-term earnings growth and earnings stability in challenging years
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Long-term earnings growth and earnings stability in challenging years 2023: delivering on net income guidance and material balance-sheet strengthening Group net income Guidance 1,825 1,407 1,284 1,231 Transition 1,151 1,171 from IFRS 4 1,060 986 9
Slide 22: Increase in shareholders’ equity mainly driven by retained earnings
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Increase in shareholders’ equity mainly driven by retained earnings Increase in CSM and RA will contribute to earnings over time Change in shareholders' equity Contractual Service Margin (net) and Risk Adjustment 1,825 Total 1,169 11,428 10,127 +1
Slide 23: Long-term track record of high and stable return on equity
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Long-term track record of high and stable return on equity RoE of 19.0% well above target for 2023 Return on Equity: average2) Average RoE and standard deviation 2014 - 2023 RoE 19.0% 14% Hannover Re -2.8%p 12% Peer 14.4% +4.5%p 3.0% 13.1% 13.2% 1
Slide 24: Hannover Re remains one of the most profitable reinsurers
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Hannover Re remains one of the most profitable reinsurers No. 1 position on 5-year average RoE – significantly above peer average 1) 1) 1) 1) 2) 2019 2020 2021 2022 2023 2019 - 2023 avg. Company RoE Rank RoE Rank RoE Rank RoE Rank RoE Rank Rank Ro
Slide 25: Value creation for shareholders driven by growth in book value and dividends
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Value creation for shareholders driven by growth in book value and dividends Increasing interest rates and transition to IFRS 17 led to decrease in equity in 2022 Book value and accumulated paid dividends 153.45 57.73 53.23 69.48 47.73 Transition
Slide 26: Dividend strategy emphasizes continuity of ordinary dividend
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Dividend strategy emphasizes continuity of ordinary dividend 2023: increased ordinary dividend reflects positive earnings trend Dividend per share in EUR Dividend strategy Ordinary dividend per share Special dividend per share 7.20 1.20 6.00 5.75
Slide 27: HR share price increased by +84% over the past 3 years
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | HR share price increased by +84% over the past 3 years Performance comparison (incl. reinvested dividends) 220% 200% 180% +84% +74% 160% +46% 140% +39% 120% +22% +22% 100% 80% 60% 40% Hannover Re DAX SXIP Munich Re Swiss Re Scor 27 Hannover Re: th
Slide 28: Annual Total Shareholder Return (TSR) of 12.6% since IPO
| 1 | 1.3 About us | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Annual Total Shareholder Return (TSR) of 12.6% since IPO Value creation since IPO Total Shareholder Return (TSR) 5y TSR 13.3% p.a. 10y TSR 15.0% p.a. +2,976% 20y TSR 15.1% p.a. Since IPO TSR 12.6% p.a. 28 Hannover Re: the somewhat different reinsu
Slide 29: Agenda
Agenda 1 Hannover Re Group 1.1 Equity Story 2 1.2 Positioning in the reinsurance market 4 1.3 About us 9 1.4 Sustainability 29 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2
Slide 30: Sustainability at Hannover Re: How we evolved
| 1 | 1.4 Sustainability | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Sustainability at Hannover Re How we evolved 2011 2015 2017 2019 2021 2023 • Publication of • Listed in • Listed in Global • Phased exit for any coal • Signature of UN PSI • CSRD pre-study first sustainability FTSE4Good-Index Challenges inde
Slide 31: Sustainability embedded into our Group Strategy 2024 - 2026
| 1 | 1.4 Sustainability | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Sustainability embedded into our Group Strategy 2024 - 2026 Focussing on environmental stewardship Staying Focused. Thinking Ahead. Decarbonisation Engagement Opportunities Engage with cedants, investee companies Strengthen societal resilien
Slide 32: Net zero targets
| 1 | 1.4 Sustainability | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Net zero targets Comprehensive goal setting in core business and own business operations Net zero Net zero Net zero by 2050 by 2050 by 2030 Asset Management Underwriting Own business operations • Climate strategy: • Exit from all risks conne
Slide 33: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 33 Hannover Re: the somewhat different reinsurer
Slide 34: We are somewhat different: Our approach in P&C reinsurance
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | We are somewhat different Our approach in P&C reinsurance Distribution Underwriting Distribution channels Property & Casualty reinsurance Empowered underwriters • Flexible cost base due to • Fast decision making and relatively hig
Slide 35: Broad portfolio diversification in Property & Casualty across business lines
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Broad portfolio diversification in Property & Casualty across business lines Reinsurance revenue (gross) Reinsurance revenue (gross) split by segments 4% EMEA 1) 3% 6% Americas1) 24% 16,824 m. EUR APAC 1) 5% 7% 5% 4% 4% 24% Struct
Slide 36: Margin-oriented U/W approach leads to profitable growth
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Margin-oriented U/W approach leads to profitable growth 2023 EBIT reflects material increase in reserve resiliency Gross written premium Reinsurance EBIT/EBIT margin revenue 24,242 10.0% 9.1% 7.7% 6.2% 6.0% 5.8% 19,224 1,512 16,82
Slide 37: Large losses well within budget of EUR 1,725 m.
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Large losses well within budget of EUR 1,725 m. Natural and man-made catastrophe losses1) in m. EUR 2,944 2,649 2,127 1,970 1,790 1,722 1,706 1,595 1,621 1,497 1,250 1,127 850 956 714 846 724 578 559 573 627 426 2013 2014 2015 201
Slide 38: Resiliency reserve decreased as expected to EUR 1,378 m. in 2022
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Resiliency reserve decreased as expected to EUR 1,378 m. in 2022 Material increase in reserve resiliency in 2023, expected to be ~2 bn.1) Development of resiliency reserves reviewed by WTW P&C gross loss reserves4) EUR 41 bn. in m
Slide 39: 1 January 2024 renewals: High quality of P&C business further improved
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 1 January 2024 renewals: High quality of P&C business further improved Successful expansion of strong portfolio from underwriting year 2023 Successful renewal • Growth supported by superior financial strength, favourable market po
Slide 40: Premium increased by 6.9% in attractive market environment
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 | 8 | 9 | Premium increased by 6.9% in attractive market environment 1 January 2024 renewals Total Treaty Reinsurance in m. EUR Change in shares: -0.5% Change in price: +2.3% % on renewed: Change in volume: +6.0% [100.0%] [-9.2%] [90.8%] [+
Slide 41: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 41 Hannover Re: the somewhat different reinsurer
Slide 42: We are somewhat different: Our approach in L&H reinsurance
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | We are somewhat different Our approach in L&H reinsurance Solution-driven Responsive We strive to achieve Life & Health reinsurance We prioritise fast time-to- exceptional results market • Strong entrepreneurial spirit • Rapid decision-
Slide 43: Well-balanced diversification across Life & Health segments
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Well-balanced diversification across Life & Health segments Reinsurance revenue (gross) Reinsurance revenue (gross) split by segments 21% 15% Financial Solutions 7,633 m. EUR 14% 22% Longevity 22% 23% Mortality 2022: 7,752 m. EUR Morbid
Slide 44: Favourable growth in profitability after Covid-19 impacts in 2020 and 2021
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Favourable growth in profitability after Covid-19 impacts in 2020 and 2021 2023: strong operating performance in L&H reinsurance, well above target Gross written premium Reinsurance EBIT/EBIT margin revenue 12.6% 9,033 8,538 9.1% 9.2% 8
Slide 45: Successful new business generation will contribute to future earnings
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Successful new business generation will contribute to future earnings Value of New Business development (Solvency II) New business CSM and LC (net) + Extensions on existing contracts (IFRS 17) 869 778 755 663 496 290 326 1) 1) 1) 1) 1)
Slide 46: Our clients are served by our network of offices and expert networks
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Our clients are served in the markets by our network of offices and by our solution-orientated expert networks Automated Biometric U/W systems research L&H Expert networks Longevity Financial solutions solutions R&D Health (re-) technol
Slide 47: Complete offerings: Risk and financial solutions & services
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Complete offerings Risk and financial solutions & services Risk Solutions Financial Solutions Reinsurance Services Competitive terms and appropriate Structured agreements to achieve Comprehensive range geared capacity for technical risk
Slide 48: Example risk solution: mortality & longevity
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Example risk solution: mortality & longevity Risks Trigger Mortality Life expectancy Life expectancy Risk of paying more death benefits than expected Mortality Mortality Risk Longevity Risk of paying annuities longer than expected Longe
Slide 49: Example risk solution: morbidity - critical illness
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Example risk solution: morbidity - critical illness Morbidity Product: Critical illness insurance Risk of experiencing a higher claims burden from traditional Helps consumers to protect their life quality health, critical illness, long-
Slide 50: Example: services offered with risk and/or financial solutions
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Example: services offered with risk and/or financial solutions Products Innovative, e.g. products with little or no underwriting Processes Lean, e.g. distribution directly to individuals, without advisers Biometrics Cover of death, dise
Slide 51: Primary differences between L&H and P&C business
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Primary differences between L&H and P&C business Simplified illustration Protected classes / types of insurance business Few Many Involvement of brokers Low High Number of competitors Few Many Number of reinsurer participating in one tr
Slide 52: Takeaways for the Life & Health Business Group
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 | 8 | 9 | Takeaways for the Life & Health Business Group Business Service 1 All lines of life, health & annuities 4 An important component Focus Premium 2 Biometric risks not asset risk 5 Not the only meaningful benchmark → EBIT Relationship Fina
Slide 53: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 53 Hannover Re: the somewhat different reinsurer
Slide 54: AuM +8.8%, mainly driven by strong operating cash flow
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | 8 | 9 | AuM +8.8%, mainly driven by strong operating cash flow Increase in ordinary investment income predominantly due to higher locked-in yields Operating cash flow Assets under own management (AuM) Investment income 5,785 60,129 55,285 4,947 1,5
Slide 55: 2023: strategic asset allocation still filled with decent portion of liquidity
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | 8 | 9 | 2023: strategic asset allocation still filled with decent portion of liquidity Some risk taking in credit spectrum but at lower pace than previous years Asset class 2018 2019 2020 2021 2022 2023 Fixed Income 87% 87% 85% 86% 83% 85% Governme
Slide 56: Currency allocation matches Solvency II liability profile
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | 8 | 9 | Currency allocation matches Solvency II liability profile as much as possible Duration-neutral strategy intact; lower modified duration as result of yield increases Currency split of investments Others 13% • Modified duration of fixed-incom
Slide 57: High-quality fixed-income book well balanced
| 1 | 2 | 3 | 4 Investment management | 5 | 6 | 7 | 8 | 9 | High-quality fixed-income book well balanced Geographical allocation mainly in accordance with our broad business diversification Pfandbriefe, Short-term Governments Semi-governments Corporates Covered bonds, Total investments, cash ABS AAA
Slide 58: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 58 Hannover Re: the somewhat different reinsurer
Slide 59: Our capital structure consists not only of equity
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Our capital structure consists not only of equity Use of hybrids, securitisations etc. lowers cost of capital and levers RoE • Equity capital is by far the most expensive form of capital. Therefore, we make optimal use of equity subst
Slide 60: Continuous strong support of Hannover Re’s NatCat placements
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Total placed NatCat capacity of EUR 1.1 bn. in 2024 Continuous strong support of Hannover Re’s NatCat placements Agg. XL ~ EUR 71 m. Whole Account XL ~ EUR 1.1 bn. ~ EUR 387 m. K-Cession securitisation ~ USD 757 m.1) Group EBIT Total
Slide 61: We pioneered in transferring risks into capital markets via securitisations
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | We pioneered in transferring risks into capital markets via securitisations Equity Substitutes Transactions Expired transactions On-going transactions Portfolio-linked securitisation (P&C), K-Cessions (in m. USD if not otherwise state
Slide 62: Financial strength ratings
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Financial strength ratings Group S&P A.M. Best Berkshire Hathaway AA+ A++ Hannover Re AA- A+ 1) Munich Re AA- A+ XL Bermuda AA- A+ Swiss Re AA- A+ Everest Re A+ A+ Partner Re A+ A+ SCOR A+ A 1) Lloyd's AA- A As at 3 April 2024 1) Posi
Slide 63: Benefits of an above-average rating
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Benefits of an above-average rating We have a better showing of business than the Our cost of financing in the capital markets average player is lower • Access to all lines of business • Hybrid bonds trade at tighter spreads Low cost
Slide 64: The risk is manageable
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | The risk is manageable Stress tests for natural catastrophes after retrocessions Effect on forecast net income in m. EUR 2022 2023 100-year loss (1,378) (1,426) Hurricane US/Carribean 250-year loss (1,859) (1,946) 100-year loss (758)
Slide 65: Capital adequacy ratio remains very strong
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Capital adequacy ratio remains very strong Own funds increase supported by favourable new business development Development of the Solvency II ratio 269% 243% 252% • Increase in eligible own funds due to favourable new business develop
Slide 66: Individual events with limited impact on Solvency ratio
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Individual events with limited impact on Solvency ratio Solvency ratio robust under stressed conditions Sensitivities and stress tests Solvency II ratio Basis 252% 1) Severe Atlantic tropical cyclone 225% 1) Severe European winter sto
Slide 67: Efficient capital deployment supported by significant diversification
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | Efficient capital deployment supported by significant diversification Increase in own funds and capital requirements in line with business growth Solvency Capital Requirements in m. EUR Property & Casualty 6,085 (5,664) Life & Health
Slide 68: High-quality capital base with 87% Tier 1
| 1 | 2 | 3 | 4 | 5 Capital and risk management | 6 | 7 | 8 | 9 | High-quality capital base with 87% Tier 1 Unutilised Tier 2 provides additional flexibility Reconciliation of IFRS Shareholders’ equity vs. Solvency II own funds in m. EUR 8,625 1,717 896 18,952 17,453 912 635 2,550 13% Unutilised Tie
Slide 69: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 69 Hannover Re: the somewhat different reinsurer
Slide 70: Transition to IFRS 17 moderately increases earnings level
| 1 | 2 | 3 | 4 | 5 | 6 Transition to IFRS 17 | 7 | 8 | 9 | Transition to IFRS 17 moderately increases earnings level Impact of IFRS 17/9 accounting change Property & Casualty reinsurance Life & Health reinsurance Investments • Prudent Reserving approach • CSM release with stabilising • Volatility l
Slide 71: Reinsurance revenue will be lower than gross written premium
| 1 | 2 | 3 | 4 | 5 | 6 Transition to IFRS 17 | 7 | 8 | 9 | Reinsurance revenue will be lower than gross written premium Reinsurance revenue Accounting impact IFRS 17 IFRS 17 impact EUR 33.3 bn. • Exclusion of commissions and non-distinct investment components (NDIC) EUR 24.1 bn. • Exclusion of unea
Slide 72: IFRS 17 - Full adoption of GMM allows to steer business consistently
| 1 | 2 | 3 | 4 | 5 | 6 Transition to IFRS 17 | 7 | 8 | 9 | IFRS 17 - Full adoption of GMM allows to steer business on a consistent basis Ensuring transparency and bridging the GA(A)P to economic view Full adoption of General Measurement Model (GMM) Valuation methods and rationale for entire busines
Slide 73: Investments: IFRS 9 has limited impact on underlying earnings level
| 1 | 2 | 3 | 4 | 5 | 6 Transition to IFRS 17 | 7 | 8 | 9 | Investments: IFRS 9 has limited impact on underlying earnings level P&L volatility likely to increase due to higher share of assets FVPL Underlying development Accounting impact IFRS 9 • Ordinary investment income • Volatility likely to inc
Slide 74: FY2022 IFRS 17/9 EBIT IFRS17 vs IFRS4
| 1 | 2 | 3 | 4 | 5 | 6 Transition to IFRS 17 | 7 | 8 | 9 | FY2022 IFRS 17/9 EBIT IFRS17 vs IFRS4 P&C • Discounted presentation of technical results, including interest accretion, resulting in a net effect of about 150 m. • Volume-driven change in currency result 116 m. 307 (20) L&H 2,087 • IFRS4 co
Slide 75: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 75 Hannover Re: the somewhat different reinsurer
Slide 76: Delivering on net income guidance and material balance-sheet strengthening
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Delivering on net income guidance and material balance-sheet strengthening Proposed increase in ordinary dividend to 6.00 EUR and total dividend to 7.20 EUR Group P&C reinsurance Reinsurance revenue Group net income Reinsurance revenue (gross
Slide 77: Improved margins result in higher underlying profitability
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Improved margins result in higher underlying profitability Material increase in reserve resiliency, expected to be ~ 2 bn.1) Property & Casualty R/I Q4/2022 Q4/2023 2022 2023 • Reinsurance Revenue (RR) / New business CSM & LC (net) Reinsuranc
Slide 78: Large losses within FY/2023 budget
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Large losses within FY/2023 budget Catastrophe losses1) in m. EUR Date Gross Net Floods, New Zealand 27 Jan - 6 Feb 93.7 46.8 Wildfires, Chile 01 Feb - 31 Mar 19.2 19.2 Earthquake, Türkiye 06 Feb 281.0 270.1 Cyclone "Gabrielle", New Zealand 1
Slide 79: Large losses within FY/2023 budget
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Large losses within FY/2023 budget Catastrophe losses1) in m. EUR Date Gross Net Wildfires, Canada 15 - 31 Aug 12.9 7.1 Storms "Erwin" and "Denis", Europe 24 - 30 Aug 33.3 16.6 Hurricane "Idalia", USA 28 - 31 Aug 39.1 27.2 Earthquake, Morocco
Slide 80: Strong operating performance in L&H reinsurance, well above target
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Strong operating performance in L&H reinsurance, well above target Life & Health R/I Q4/2022 Q4/2023 2022 2023 • Reinsurance Revenue (RR) / New Business CSM & LC (net) Reinsurance revenue (gross) 1,809 1,854 7,752 7,633 – Reinsurance revenue
Slide 81: RoI well above target, driven by favourable ordinary income
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | RoI well above target, driven by favourable ordinary income Resilient portfolio with moderate impact from credits and real estate valuations in m. EUR 2022 2023 RoI 1) 1) Ordinary investment income 1,898 1,998 3.5 % • Increase in ordinary inc
Slide 82: Our business groups at a glance 2023 vs. 2022
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Our business groups at a glance 2023 vs. 2022 Property & Casualty R/I Life & Health R/I Total in m. EUR 2022 2023 ∆-% 2022 2023 ∆-% 2022 2023 ∆-% Reinsurance revenue (gross) 16,265 16,824 +3.4% 7,752 7,633 -1.5% 24,017 24,456 1.8% Reinsurance
Slide 83: Our business groups at a glance Q4/2023 vs. Q4/2022
| 1 | 2 | 3 | 4 | 5 | 6 | 7 Annual results 2023 | 8 | 9 | Our business groups at a glance Q4/2023 vs. Q4/2022 Property & Casualty R/I Life & Health R/I Total in m. EUR Q4/2022 Q4/2023 ∆-% Q4/2022 Q4/2023 ∆-% Q4/2022 Q4/2023 ∆-% Reinsurance revenue (gross) 3,876 4,088 5.5% 1,809 1,854 2.5% 5,685 5,94
Slide 84: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 84 Hannover Re: the somewhat different reinsurer
Slide 85: Significant increase in group net income guidance for 2024
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 Outlook | 9 | Significant increase in group net income guidance for 2024 Increasing earnings contribution from all three profit engines Expected contribution Group financial guidance 2024 from our business groups Property & Casualty Combined ratio < 89% Revenue growth
Slide 86: Agenda
Agenda 1 Hannover Re Group 2 Property & Casualty reinsurance 33 3 Life & Health reinsurance 41 4 Investment management 53 5 Capital and risk management 58 6 Transition to IFRS 17 69 7 Annual results 2023 75 8 Outlook 84 9 Appendix 86 86 Hannover Re: the somewhat different reinsurer
Slide 87: Financial calendar and our Investor Relations contacts
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 Appendix | Financial calendar and our Investor Relations contacts 6 May 2024 Karl Steinle General Manager Annual General Meeting Phone: +49 511 5604 - 1500 [email protected] 14 May 2024 Quarterly Statement as at 31 March 2024 Axel Bock Senior Investor R
Slide 88: Basic information on the Hannover Re share
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 Appendix | Basic information on the Hannover Re share Basic information International Securities Identification Number (ISIN) DE 000 840 221 5 Ticker symbols -Bloomberg HNR1 -Thomson Reuters HNRGn -ADR HVRRY Exchange listings -Germany Xetra, Frankfurt, Munich, Stu
Slide 89: Details on reserve review by WTW
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 Appendix | Details on reserve review by WTW • The scope of WTW’s work was to review certain parts of the held loss and loss adjustment expense reserve, net of outwards reinsurance, from Hannover Re Group’s consolidated IFRS financial statements and the implicit re
Slide 90: Disclaimer
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 Appendix | Disclaimer This presentation does not address the investment objectives or financial situation of any particular person or legal entity. Investors should seek independent professional advice and perform their own analysis regarding the appropriateness o