Life and health reinsurance
Key figures for life and health reinsurance | |||||||
---|---|---|---|---|---|---|---|
in EUR million | 2013 | 20121 | |||||
1.1. – 30.6. | 1.7. – 30.9. | +/- previous year | 1.1. – 30.9. | +/- previous year | 1.7. – 30.9. | 1.1. – 30.9. | |
Gross written premium | 3,129.7 | 1,451.9 | -8.7% | 4,581.6 | +4.1% | 1,590.5 | 4,399.3 |
Net premium earned | 2,787.3 | 1,236.3 | -12.9% | 4,023.7 | +2.1% | 1,420.1 | 3,941.5 |
Investment income | 315.6 | 144.9 | -27.8% | 460.5 | -5.5% | 200.8 | 487.2 |
Operating result (EBIT) | 111.4 | 32.0 | -58.9% | 143.4 | -38.5% | 77.8 | 233.3 |
Net income after tax | 83.8 | 52.1 | -13.9% | 136.0 | -27.9% | 60.5 | 188.6 |
Earnings per share in EUR | 0.70 | 0.43 | -13.9% | 1.13 | -27.9% | 0.50 | 1.56 |
Retention | 89.6% | 86.1% | 88.5% | 89.4% | 89.3% | ||
EBIT margin2 | 4.0% | 2.6% | 3.6% | 5.5% | 5.9% | ||
1 Adjusted on the basis of IAS 8 2 Operating result (EBIT)/net premium earned |
The business environment in international life and health reinsurance was essentially unchanged in the third quarter of 2013. Life insurers, in particular, continue to be faced with low asset returns and hence declining investment income. Along with these difficult conditions on the capital markets – where to a limited extent reinsurance can bring financial relief – the life and health reinsurance industry is especially benefiting in emerging markets such as China and India as well as in South America from a rising insurance density among the growing middle class. Furthermore, in mature markets such as the United States, Germany, France or indeed Scandinavia reinsurance solutions designed to optimise a client's capital structure and solvency are increasingly enjoying brisk demand.
Life and health reinsurance was adversely impacted by Australian disability business in the quarter just ended. This contrasted with positive effects from US mortality business, although these did not entirely offset the losses. We are nevertheless satisfied with the development of the rest of the life and health reinsurance portfolio.
The increasing demand for financially oriented reinsurance products can be felt worldwide. Our customers are showing strong interest in potential solutions for solvency optimisation as well as assistance with new business financing.
Gross written premium in life and health reinsurance amounted to EUR 4.6 billion (EUR 4.4 billion) as at 30 September 2013, an increase of 4.1% relative to the corresponding period of the previous year or as much as 7.4% at constant exchange rates. The retention retreated slightly to 88.5% (89.3%).
Net premium earned grew by 2.1% in the period under review to EUR 4.0 billion (EUR 3.9 billion). At constant exchange rates, net premium would have risen by 5.4%.
The operating profit (EBIT) contracted to EUR 143.4 million (EUR 233.3 million) as at 30 September 2013. The EBIT margin for the reporting categories of Mortality and Morbidity, which at 2.8% fell short of the target mark of 6%, reflects the deterioration in the experience of Australian disability business. The Financial Solutions and Longevity categories beat the targeted 2% mark with an EBIT margin of 4.6%. Group net income came in at EUR 136.0 million (EUR 188.6 million), equivalent to earnings per share of EUR 1.13 (EUR 1.56).