Life and health reinsurance
| Key figures for life and health reinsurance | |||||||
|---|---|---|---|---|---|---|---|
| in EUR million | 2013 | 20121 | |||||
| 1.1. – 31.3. | 1.4. – 30.6. | +/- previous year | 1.1. – 30.6. | +/- previous year | 1.4. – 30.6. | 1.1. – 30.6. | |
| Gross written premium | 1,560.3 | 1,569.4 | +10.9% | 3,129.7 | +11.4% | 1,414.8 | 2,808.8 |
| Net premium earned | 1,388.9 | 1,398.5 | +11.0% | 2,787.3 | +10.5% | 1,259.9 | 2,521.4 |
| Investment income | 162.4 | 153.3 | +40.6% | 315.6 | +10.2% | 109.0 | 286.4 |
| Operating result (EBIT) | 88.3 | 23.1 | -30.4% | 111.4 | -28.3% | 33.1 | 155.4 |
| Net income after tax | 65.3 | 18.6 | -33.3% | 83.8 | -34.5% | 27.9 | 128.0 |
| Earnings per share in EUR | 0.54 | 0.15 | -33.3% | 0.70 | -34.5% | 0.23 | 1.06 |
| Retention | +90.0% | +89.3% | +89.6% | +87.6% | +89.2% | ||
| EBIT margin2 | 6.4% | 1.6% | 4.0% | 2.6% | 6.2% | ||
| 1 Adjusted on the basis of IAS 8
2 Operating result (EBIT)/net premium earned | |||||||
As anticipated, attractive business opportunities presented themselves in life and health reinsurance during the first half of 2013. A dominant topic in the industry continues to be protection for a progressively ageing population, especially in industrialised nations such as the United Kingdom, Germany, France, United States, Japan and in Scandinavian countries. Strong demand can also be observed for financially oriented reinsurance solutions designed to provide capital relief for our clients or to optimise their capital structure and associated risk management in these markets.
The protracted low level of interest rates and resulting decline in investment income are putting the insurance industry under growing strain, on the one hand already making it necessary to establish additional reserves and hold them available for future claims while on the other hand giving rise to new capital and solvency requirements. The latter necessitates, among other things, reinsurance solutions that offer an alternative means of raising capital. The rising insurance density in major markets of the future, such as Latin America, Eastern Europe and Asia, ensured further pleasing growth in these regions in the first half of the year. The principal focus in these markets is on traditional reinsurance products covering the technical risks of mortality, morbidity and disability as well as on products designed to finance new business.
Gross written premium in life and health reinsurance amounted to EUR 3.1 billion (EUR 2.8 billion) as at 30 June 2013, a pleasing increase of 11.4%; at constant exchange rates growth would have been as high as 13.4%. The retention increased slightly to 89.6% (89.2%). Net premium earned grew by 10.5% to EUR 2.8 billion (EUR 2.5 billion). At constant exchange rates, net premium would have risen by 12.6%.
For the most part, the development of business in the reporting period just ended fell somewhat short of our expectations. This can be attributed chiefly to losses incurred in underwriting years prior to 2005 in US mortality business.
All in all, we generated an operating profit (EBIT) of EUR 111.4 million (EUR 155.4 million) in life and health reinsurance as at 30 June 2013. This corresponds to an EBIT margin of 4.0% for the reporting categories of Financial Solutions and Longevity, hence beating the target mark of 2.0%. Given the EBIT margin of 6.0% targeted for the Mortality and Morbidity categories, the 4.0% figure recorded fell short of expectations. Group net income came in at EUR 83.8 million (EUR 128.0 million), equivalent to earnings per share of EUR 0.70 (EUR 1.06).