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Business development

We are satisfied with the development of our business in the third quarter. Market conditions for our company, as a financially strong reinsurer, remain good. Even though competition is more marked in certain segments and regions, prices in non-life reinsurance are broadly commensurate with the risks. Life and health reinsurance offers us sufficient potential for profitable growth. Both business groups contributed to the good result. The major loss situation in the third quarter was notable for a number of natural catastrophe events, especially in Germany and Canada. The hurricane season in the United States and the Caribbean, on the other hand, has so far passed off without appreciable losses for the (re)insurance industry. All in all, major loss expenditure as at 30 September 2013 was in line with our expectations.

Gross written premium in total business increased by 2.3% as at 30 September 2013 to reach EUR 10.5 billion (previous year: EUR 10.3 billion). At constant exchange rates growth would have amounted to 4.7%. The level of retained premium decreased slightly to 88.9% (89.7%). Net premium climbed 1.8% to EUR 9.1 billion (EUR 9.0 billion). Growth of 4.2% would have been booked for net premium at constant exchange rates.

Our investments developed as anticipated, with the portfolio of assets under own management remaining stable at EUR 31.8 billion (31 December 2012: EUR 31.9 billion). Owing to the sustained low interest rate level, ordinary investment income excluding interest on deposits was as expected lower than in the comparable period at EUR 781.1 million (EUR 822.0 million); the resulting annualised return stood at 3.3% (3.7%). Interest on deposits climbed to EUR 267.6 million (EUR 247.6 million).

The write-downs taken in the period under review were again only very minimal in volume. Given the challenging conditions on capital markets and owing to the elimination of various positive special effects recorded in the previous year, our income from investments under own management fell short of the comparable period: it amounted to EUR 785.6 million (EUR 961.2 million) as at 30 September 2013.

The operating profit (EBIT) as at 30 September 2013 totalling EUR 961.6 million (EUR 1.0 billion) was satisfactory. Group net income was lower than in the comparable period of the previous year, falling by 8.6% to EUR 613.2 million (EUR 670.8 million). Earnings per share came in at EUR 5.08 (EUR 5.56).

The shareholders' equity of Hannover Re contracted to EUR 5.8 billion (31 December 2012: EUR 6.0 billion). The decline was due primarily to the dividend payment and the decrease in hidden reserves owing to movements in market yields. The book value per share amounted to EUR 47.73 (31 December 2012: EUR 50.02). The annualised return on equity reached 13.9% (16.5%).

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