Life and health reinsurance
Life and health reinsurance
| Key figures for life and health reinsurance | |||||||
|---|---|---|---|---|---|---|---|
| in EUR million | 2014 | 20131 | |||||
| 1.1. – 31.3. | +/– previous year | 1.1. – 31.3. | |||||
| Gross written premium | 1,516.7 | -2.8% | 1,560.3 | ||||
| Net premium earned | 1,281.0 | -7.8% | 1,388.9 | ||||
| Investment income | 152.0 | -6.4% | 162.4 | ||||
| Operating result (EBIT) | 65.6 | -36.0% | 102.4 | ||||
| Net income after tax | 43.4 | -42.2% | 75.1 | ||||
| Earnings per share in EUR | 0.36 | -42.2% | 0.62 | ||||
| Retention | 84.5% | 90.0% | |||||
| EBIT margin2 | 5.1% | 7.4% | |||||
| 1 Adjusted pursuant to IAS 8 (cf. Section 2 of the notes) 2 Operating result (EBIT)/net premium earned | |||||||
The protracted low level of interest rates is having a dampening effect on life insurance and reinsurance in Europe and the United States. In Germany the distribution of valuation reserves under life insurance policies continues to be the subject of heated debate. The traditional life insurance model has generally been cast into question owing to the low interest rate level and the insurance industry is called upon to establish new products with guaranteed benefits in the market. Across the markets in general our clients, namely primary insurers, are increasingly expecting more service from their reinsurance providers, especially in the area of medical underwriting. We take an exceptionally positive view of this trend and support them with our expertise.
In the first quarter we generated disproportionately strong growth, most notably in Asia. Overall, though, the premium volume fell slightly short of our growth target.
In our US business we also recorded a risk experience that fell slightly short of our expectations. These divergences are, however, within the bounds of the natural volatility of the underlying business. Sharia-compliant retakaful business delivered a pleasing profit contribution. With Hannover Re now ranking as one of the largest providers worldwide in this business segment, we shall maintain our focus here on Middle and Far Eastern markets such as Malaysia, Saudi Arabia and the United Arab Emirates.
Gross written premium in life and health reinsurance amounted to EUR 1.5 billion (EUR 1.6 billion) as at 31 March 2014, a decrease of 2.8%. At constant exchange rates growth of 0.7% would have been generated. Owing to a reduced retention, net premium earned fell by 7.8% to EUR 1.3 billion (EUR 1.4 billion); this is equivalent to a reduction of 4.5% on a currency-adjusted basis.
Investment income for life and health reinsurance contracted by 6.4% to EUR 152.0 million (EUR 162.4 million). The performance of the ModCo derivatives recognised in income fell short of the previous year at EUR 1.6 million (EUR 5.6 million).
The operating profit (EBIT) in life and health reinsurance reached EUR 65.6 million (EUR 102.4 million) as at 31 March 2014. This is equivalent to an EBIT margin of 5.9% for Financial Solutions and Longevity business. The target of 2% was thereby achieved. The EBIT margin for Mortality and Morbidity business stood at 4.5% and thus fell somewhat short of the targeted 6%. Group net income came in at EUR 43.4 million (EUR 75.1 million) and earnings per share amounted to EUR 0.36 (EUR 0.62).