Our reinsurance business developed highly satisfactorily in the first half of 2015. In property and casualty reinsurance we booked substantial currency-adjusted growth in gross premium, despite our selective underwriting policy. Even though a number of smaller major losses were incurred in the second quarter together with some belatedly reported large losses for the first quarter, total expenditure on major losses remained below the budget set aside for the first six months of 2015. In life and health reinsurance we were able to act on various opportunities, most notably in Asian markets, and improved our result relative to the previous year’s period.
Gross written premium in our total reinsurance business increased sharply – especially due to the strong US dollar – by 21.5% as at 30 June 2015 to EUR 8.6 billion (EUR 7.1 billion); at constant exchange rates, growth would have still been as high as 9.5%. This figure for the first six months shows that we are progressing very much as planned towards stronger gross premium growth for the full year. The level of retained premium rose to 88.3% (87.7%). Net premium earned climbed by 20.2% to EUR 7.0 billion (EUR 5.8 billion); growth would have amounted to 8.3% at constant exchange rates.
In view of the continued low interest rate environment, we are very satisfied with the development of our investments. Having surged substantially in the first quarter, our portfolio of assets under own management retreated appreciably to EUR 37.4 billion, but it remains above the level of 31 December 2014 (EUR 36.2 billion). The decline relative to the first quarter was driven principally by lower valuation reserves as a consequence of higher interest rates at the long end of the maturity curve. Despite the broadly sustained low interest rate environment, ordinary investment income excluding interest on deposits was sharply up on the comparable period at EUR 598.7 million (EUR 490.1 million). This includes not only increased earnings from fixed-income securities but also sharply higher income from our real estate investments and the special effect in life and health reinsurance amounting to EUR 39.3 million. Interest on deposits increased to EUR 197.4 million (EUR 174.9 million).
Net realised gains on disposals were lower than in the corresponding period of the previous year at EUR 66.6 million (EUR 88.5 million). The higher realised gains recorded in the previous year were driven in particular by 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 1.6 million, as against a positive amount of EUR 10.0 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 30 June 2015 to EUR 601.3 million (EUR 532.6 million) on the back of the stronger ordinary income. 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 3.4% (3.3%).
The operating profit (EBIT) for the first half-year was thoroughly satisfactory at EUR 789.4 million (EUR 687.3 million). Group net income improved by a further 19.7% on the already very good result of the previous year to reach EUR 531.9 million (EUR 444.4 million). Earnings per share amounted to EUR 4.41 (EUR 3.69).
The shareholders’ equity of Hannover Re remained at a robust EUR 7.7 billion as at 30 June 2015 (31 December 2014: EUR 7.6 billion) despite the dividend payment of EUR 512.5 million. The book value per share amounted to EUR 63.62 (31 December 2014: EUR 62.61). The annualised return on equity for the first six months stood at 14.0% (31 December 2014: 14.7%).