Being in excellent shape for hardening market

Transcription

Being in excellent shape
for hardening market opportunities
André Arrago
Member of the Executive Board
Goldman Sachs - 15th Annual European Financials Conference
Paris, 8 June 2011
Group 2010 | Diversification | Growth | Life and health R/I | Innovation | Admin. expense ratio | Rating | Outlook |
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 of investing in any of our securities.
While Hannover Re has endeavoured to include in this presentation information it believes to be reliable,
complete and up-to-date, the company does not make any representation or warranty, express or implied,
as to the accuracy, completeness or updated status of such information.
Some of the statements in this presentation may be forward-looking statements or statements of future
expectations based on currently available information. Such statements naturally are 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.
This presentation serves information purposes only and does not constitute or form part of an offer or
solicitation to acquire, subscribe to or dispose of, any of the securities of Hannover Re.
© Hannover Rückversicherung AG. All rights reserved.
Hannover Re is the registered service mark of Hannover Rückversicherung AG.
Strong topline growth and all-time high in earnings
Driven by solid technical and investment income and positive tax one-off
Favourable
reinsurance
markets
High
catastrophe
frequency

Strong growth in non-life reinsurance
+10.3%, supported by sound pricing

Growth within expectations in life and health
+12.4%, most notably from enhanced
annuities and emerging markets
Result 2010
GWP:
+11.2%
NPE:
+7.9%
Net income:


Increase of net investment income
by 12.4%
Large losses at EUR 662 m.
well above budget (EUR 500 m.)
EPS:
6.21 EUR
RoE:
18.2%
Equity:

Stable
capital
markets
1
One-offs 2010:
Sale of Clarendon (EUR -69 m.) and
tax effect from BFH decision (EUR +112 m.)
EUR 749 m.
+21.4%
Proposed dividend
increase to:
2.30 EUR
Record net income despite high burden of major losses in 2010
Net (major) losses* vs. net income
in m. EUR
1,070
750
749
734
722
665
662
600
514
458
450
365
355
300
225
377
285
280
267
240
164
150
107
60
49
11
(127)
0
-150
2000
Net loss
2001
2002
Group net income
* Claims over EUR 5 m. gross
2
2003
2004
2005
2006
2007
2008
2009
2010
Hannover Re consistently among most profitable reinsurers
Even on after-tax basis, in spite of strong Bermuda competition
2006
2007
Rank
RoE
2008
Rank
RoE
2009
Rank
RoE
2010
Company
RoE
Odyssey Re
28.3%
1
25.8%
1
20.5%
1
12.1%
6
9.2%
8
19.2%
1
Renaissance Re
27.5%
2
16.9%
4
(0.4%)
7
24.4%
2
18.1%
2
17.3%
2
Hannover Re
18.7%
4
23.1%
2
(4.1%)
9
22.4%
3
18.2%
1
15.7%
3
Partner Re
21.8%
3
17.7%
3
1.1%
5
25.9%
1
11.5%
3
15.6%
4
Everest Re
18.2%
6
15.6%
5
(0.4%)
6
14.6%
4
9.9%
6
11.6%
5
Munich Re
13.5%
9
14.9%
7
6.5%
3
11.8%
7
10.7%
4
11.5%
6
Transatlantic Re
15.6%
8
15.4%
6
3.1%
4
13.2%
5
9.7%
7
11.4%
7
SCOR
12.7%
10
13.8%
8
8.9%
2
10.2%
8
10.1%
5
11.1%
8
Swiss Re
16.5%
7
13.3%
9
(3.3%)
8
2.3%
10
3.6%
10
6.5%
9
Ranking among shown peer group, based on company data, own calculation

We aim to be one of the top 3 R/I in terms of RoE
3
Rank
RoE
2006 - 2010
Rank avg. RoE
Rank
Life and health reinsurance: continuous growth
Gross written premium
in m. EUR
11,429
10.000
EBIT
1.200
1,174
1.000
25%
9,317
8,320
26%
8.000
45%
25%
800
6.000
600
75%
4.000
3,067
2,135
6%
2.000
75%
74%
55%
400
11%
89%
200
94%
0
0
1990
Non-life reinsurance

1995
2000
2005
2010
Life and health reinsurance
Reduction of group volatility due to improved diversification
4
2010
Diversification reduces capital requirements by a third
Capitalisation ratio 155%
Risk capital for the 99.97% VaR (according to internal risk model)
407
8.000
2,440
7.000
8,382
8,029
2,618
6.000
33%
diversification
315
in m. EUR
1,962
5.000
2,905
3.000
5,411
2.000
Effective
capital
requirement
4.000
1.000
0
Non-life
reinsurance
Life and health
reinsurance
Assets
The risk categories have been adapted to the Solvency II requirements
Calculation according to economic valuation principles
As at December 2010
5
Credit
Operational
HR Group
required capital
HR Group
available
economic capital
Hannover Re is well positioned. . .
. . .to compete in the prevailing non-life market conditions

Majority of business written via brokers (in US, UK, Aviation, Marine)
 Flexibility to exercise cycle management

Centralised underwriting safeguards underwriting discipline

Our U/W tools & margin requirements are based on the CoC allocated
 Selection of business that achieves our profitability targets

We have a strong rating
Growth in developed markets by seizing market opportunities

6
Well diversified and grown in selective areas
Non-life reinsurance
GWP Split
2010: EUR 6,339 m.
Global cat.
XL
5%
North America
North
America
13%
Global
facultative
11%
Global treaty
19%
Global R/I
Marine
4%
Aviation
6%
Target
markets
UK, London
market &
direct
8%
in m. EUR
-18
Germany
Structured R/I
Specialty
lines
7
GWP Growth (+10.3%)
Credit, surety & pol. risk
Germany
15%
Structured
R/I
10%
Credit, surety
& political
risks
9%
UK, London market & direct
-2.2%
34
+3.9%
-96
-13.0%
97
+20.7%
77
+17.9%
Aviation
48
+14.3%
Marine
12
+4.4%
Global treaty
229
Global facultative
Global cat XL
207
2
+23.2%
+42.6%
+0.9%
New markets' share driven by demand for longevity solutions
Life and health reinsurance
5 strategic pillars GWP
2010: EUR 5,090 m.
Financial
Solutions
8%
Conventional
R/I
43%
Growth GWP (+12.4%)
Financial
Solutions
in m. EUR
+10.0%
39
New markets
285
New Markets
28%
Bancassurance
+14.0%
65
Bancassurance
11%
Multinationals
10%
-4.9%
Multinationals -26
Conventional
R/I
8
+24.7%
173
+10.0%
Hannover Re's positioning in life and health reinsurance

Decentralised structure in order to support our direct marketing and underwriting
without utilising intermediaries or brokers

Intensive partnership with our clients looking for win-win situations rather than
zero sum games

Developing of attractive new products together with our cedents allow to provide
value adding propositions

Positioning in emerging markets enables us to benefit from the underlying
growth

We do consider acquisitions
• But only if strategic fit/complement
• No strategic prices
Growth in developed & emerging markets
 due to new products and a continued increase of population
9
Hannover Re's life and health growth drivers
Our worldwide presence and expertise is in demand

Pioneer for generation 60+ products
e. g. enhanced annuities, accident insurances, long-term care & health insurance

New customer group:
protection of longevity risks of European pension funds via longevity swaps

Significant improvement in the US term market in connection with the purchase
of a US life reinsurance portfolio
Hannover Re has several growth potentials

10
Hannover Re: an innovative reinsurer
New products/markets
Equity substitutes

Enhanced annuities

Energy savings

Retakaful

We pioneered securitisations
• For risk-management purposes
• ILS

The expertise and experience of our underwriters has allowed us to develop
leading positions in a variety of specialty markets

Our superior market positioning and local knowledge allow us to grow in
emerging markets
11
Enhanced annuities: an innovative market
Net premium earned
in m. EUR
646
600
500
408
400
277
300
208
200
150
100
63
0
2005
12
2006
2007
2008
2009
2010
Hannover Re remains the absolute cost leader
Our overhead ratio is less than half of the industry average
Administrative-expense ratio1)
7.5%
0
0
0
0
3.6%
3.2%
3.1%
2006
2007
2008
3.2%
3.2%
0
0
Own calculation
1) Administrative expenses + other technical expenses (in % of net premium earned)
2) Munich Re, SCOR, Swiss Re, Transatlantic Re, Partner Re, Everest Re
13
2009
2010
Peer average2)
2010
Financial strength ratings
Group
S&P
A.M. Best
General Reinsurance Corp.
AA+
A++
Munich Re
AA-
A+
Partner Re
AA-1)
A+
Hannover Re
AA-
A
Everest Re
A+
A+
Swiss Re
A+2)
A2)
Lloyd's
A+
A
Transatlantic Re
A+
A
SCOR
A2)
A
XL Re
A
A
As of 1 June 2011
1) Negative outlook
2) Positive outlook
14
2)
Numerous benefits of an above-average rating

We have a better showing of business than the average player
• Not excluded from virtually any business/access to all lines of business
• We enjoy a highly diversified, high quality book of business


We are on virtually all broker lists,
with cedents often demanding specific R/Is
We get very high allocations when we quote for business
• >90% vs. some 50% for a Bermuda start-up

We create lower capital charges for our cedents
• "AA" range S&P capital charge on reinsurance recoverables = 0.8%
("A" = 1.4%, BBB = 3.1%)
• As an above-average rated R/I, we "minimise" our cedents' cost of capital

Our cost of financing in the capital markets is lower
• Hybrid bonds trade at tighter spreads
• Better conditions for LoCs and credit lines
We might not (yet) get paid extra for our better rating on a
contract level, but other advantages are significant

15
Outlook
Natural catastrophes set the tone of Q1/2011
But net income still positive
Very high
catastrophe
burden

Strong growth in non-life reinsurance
+11.8%
Result 1Q/2011

Growth within expectations in life and health
+8.1%
GWP:
+10.3%
NPE:
+8.8%

Stable
capital
markets



Favourable life
reinsurance
markets
16
Strong increase of net investment income
by 40.5%, helped by inflation swaps
Net major losses of EUR 572 m.,
EUR 452 m. above Q1 budget
Extraordinary reserve run-offs in the region
of EUR 150 m.
EUR +113.5 m. tax refund from Federal
Fiscal Court
Net income:
EPS:
RoE (annualised):
Equity:
BPS:
EUR 52 m.
0.43 EUR
4.7%
-3.6%
EUR 36.05
Since EQ Japan reversal of the softening trend

Pricing trends after natural catastrophes in Q1/2011
• Australia: loss free up 20%; loss to layer up 40%
• New Zealand: loss free up 70% to 100%; loss to layer up 100% to 150%
• Japan:
– Personal accident: up 10% to 25%
– Property (proportional): reduced commissions
– Liability: up 5%
– Cargo: up 20% - 30%
– Fire XL: up 5% - 10%
– Cat XL: earthquake up 30% to 50% (major programs were extended to 7/1), wind up 5% to 25%

Other Asian markets
• Prices up 5% - 20%, partially up to 50%

Hannover Re's near-term intentions in loss exposed regions
• Australia: we are intending to expand our capacities
• Japan: slightly increased capacity for loyal Japanese clients
We expect a continued hardening for the June and July renewals,
also for US cat. business (additional impact of RMS model change)

17
Updated guidance for 2011
After Q1/2011 results reduced from EUR 650 m. to EUR 500 m.

Hannover Re Group
• Gross written premium (GWP)1) ……………………………………~ +7% - +8%
• Net premium earned (NPE)1) ……………………………………… ~ +7% - +8%

Non-life reinsurance (NPE)1) …………………………………………………. ~ +5%

Life and health reinsurance (NPE)1) ………………………………. ~ +10% - +12%

Return on investment2)3) ……………………………….........….................... ~ 3.5%

Net income2) …………………………………………………………… ~ EUR 500 m.

Dividend pay-out ratio4) …………………………………………….......... 35% - 40%
1) At unchanged f/x rates
2) Subject to no major distortions in capital markets and/or large losses in Q2-Q4/2011 not exceeding EUR 410 m.
3) Excluding effects from inflation swaps
4) Related to group net income according to IFRS
18
Our Investor Relations team
Hannover Rückversicherung AG
Karl-Wiechert-Allee 50
30625 Hannover, Germany
Karl Steinle
Klaus Paesler
General Manager
Corporate Communications
Senior IR Manager
 +49 511 5604-1500
 +49 511 5604-1736
 [email protected]
Julia Hartmann
Louise Camilleri-Wolter
IR Manager
Deputy IR Manager
 +49 511 5604-1529
 +49 511 5604-1341

Being in excellent shape for hardening market

Transcription

Documents pareils

full presentation

Pro-forma for order 2013/1402 Confederation Mondiale Des

Barclays Capital 10th Global Financials Conference, New York

Pro-forma for order 2013/1401 Confederation Mondiale Des

INDIVIDUAL HEALTH INSURANCE GUARANTEE NON ASSUJETTI

OPTION REPORTS FIRST HALF YEAR 2015 RESULTS

Invest Premiere

Makutsi Safari Farm – South Africa! „Airline-Special― 1 week : all

FACTSHEET - Solactive

CEMS CARRIER FORUM BUDAPEST 2011 REGISTRATION FORM

Setting up email with outlook express On MAC

Interim Report

India Infoline

PDF