We are highly satisfied with the development of business in the first quarter of 2015. Good results were generated in both property & casualty and life & health reinsurance. What is more, investment income performed in line with our expectations despite the challenging environment.
Gross written premium in total business increased by a very substantial 21.4% as at 31 March 2015 to EUR 4.4 billion (EUR 3.6 billion). At constant exchange rates, growth would have come in at 10.3%. This figure for the first quarter puts us comfortably within our target corridor of continued moderate growth in gross premium for the full year. The level of retained premium rose slightly compared to the corresponding period of the previous year to stand at 88.6% (88.4%). Net premium earned increased by 17.8% to EUR 3.4 billion (EUR 2.9 billion); growth would have amounted to 6.9% at constant exchange rates.
Building on the already appreciable growth in 2014, the portfolio of assets under own management rose further to EUR 39.7 billion (31 December 2014: EUR 36.2 billion). This was due primarily to exchange rate effects, although higher valuation reserves as a consequence of a further drop in interest rates also played a part here. Another very positive operating cash flow, which reached EUR 689.1 million in the first quarter, was an additional factor. Despite the broadly sustained low interest rate environment, ordinary investment income excluding interest on deposits was sharply up on the comparable period at EUR 312.2 million (EUR 241.4 million). This figure includes a special effect from the Life & Health reinsurance business group amounting to EUR 38.7 million. Interest on deposits increased to EUR 99.0 million (EUR 88.6 million).
Net realised gains on investments were somewhat lower than in the corresponding quarter of the previous year at EUR 45.0 million (EUR 54.1 million). The higher realised gains recorded in the previous year were driven in particular by activity associated with repayment of a subordinated bond. Fair value changes in our financial assets measured at fair value through profit or loss were negative on balance at EUR 10.6 million, as against a positive amount of EUR 7.4 million in the comparable period. The impairments taken in the period under review were once again only very minimal.
Income from investments under own management climbed sharply as at 31 March 2015 to EUR 316.6 million (EUR 272.5 million). The most significant factor here was the special effect in life and health reinsurance, although higher ordinary income from fixed-income investments and real estate also played a part. The lower net realised gains and a reduced result from our financial assets measured at fair value through profit or loss were thus comfortably offset. The annualised return generated on investments under own management (excluding ModCo derivatives and inflation swaps) stood at 3.5% (3.4%).
The operating profit (EBIT) for the Hannover Re Group rose to EUR 429.0 million (EUR 349.6 million) as at 31 March 2015. This pleasing increase of 22.7% can be attributed in particular to a considerably improved result in life and health reinsurance. Group net income was highly satisfactory at EUR 279.7 million (EUR 233.0 million). Earnings per share amounted to EUR 2.32 (EUR 1.93).
Shareholders’ equity once again surged vigorously to reach EUR 8.5 billion as at 31 March 2015 (31 December 2014: EUR 7.6 billion). The book value per share amounted to EUR 70.68 (31 December 2014: EUR 62.61). The annualised return on equity remained on an attractive level at 13.9% (31 December 2014: 14.7%).