| Key figures for life and health reinsurance | |||||||
|---|---|---|---|---|---|---|---|
| in EUR million | 2016 | 2015 | |||||
| 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 | 3,656.4 | 1,677.1 | -16.6% | 5,335.5 | -5.2% | 2,012.1 | 5,626.6 |
| Net premium earned | 3,328.1 | 1,513.0 | -13.0% | 4,841.1 | -0.5% | 1,739.3 | 4,864.1 |
| Investment income | 322.2 | 172.5 | -2.1% | 494.7 | -8.9% | 176.3 | 542.9 |
| Operating result (EBIT) | 179.1 | 111.3 | +140.6% | 290.4 | +17.9% | 46.2 | 246.3 |
| Net income after tax | 130.6 | 78.3 | +143.5% | 208.9 | +17.5% | 32.1 | 177.8 |
| Earnings per share in EUR | 1.08 | 0.65 | +143.5% | 1.73 | +17.5% | 0.27 | 1.47 |
| Retention | 91.8% | 90.8% | 91.5% | 87.2% | 86.8% | ||
| EBIT margin1 | 5.4% | 7.4% | 6.0% | 2.7% | 5.1% | ||
| 1 Operating result (EBIT) / net premium earned | |||||||
In the period under review our worldwide business in life and health reinsurance developed in line with expectations and generated an increased contribution to Group net income.
In large parts of Europe life and health reinsurance developed as expected, while in Germany it even performed somewhat better. Eastern European markets continued to offer promising business opportunities, driven inter alia by increasing regulatory requirements. The effects on traditional endowment life insurance products are likely to be particularly marked.
Following the implementation of Solvency II at the beginning of the year it has been evident that primary insurers in many European countries are heavily preoccupied with the challenges posed by the high capital requirements resulting from longevity business. Particularly in the United Kingdom, demand for corresponding longevity protection is exceptionally strong. Along with the challenges of Solvency II, it is evident that in the United Kingdom the initial uncertainty among policyholders has abated: after the annuity requirement was almost entirely abolished by the reform of the UK Pensions Act in April 2015 and the volume of new immediate annuities more than halved, there are now indications that demand is picking up again. All in all, these developments played a positive part in the overall performance of life and health reinsurance.
In US mortality business the measures that we have implemented in some areas of our existing portfolio are starting to bear fruit. In addition, the development of new mortality business has been pleasing. As we had anticipated, the profit contribution generated in the area of financial solutions as well as in the health and special risk portfolio was once again very positive.
Gross premium for life and health reinsurance amounted to EUR 5.3 billion (EUR 5.6 billion) as at 30 September 2016, equivalent to a decline of 5.2%. The decrease would have been 2.0% adjusted for exchange rate effects. The level of retained premium rose from 86.8% to 91.5%, as a consequence of which net premium fell only slightly by 0.5%. At constant exchange rates, growth of 2.8% would have been booked.
Investment income including income from securities deposited with ceding companies totalled EUR 494.7 million (EUR 542.9 million) in the period under review. The performance of the securities held for our account by US cedants stood at -EUR 0.3 million, a reduction compared to the same period of the previous year. Provided they develop as planned until maturity, however, the performance of the so-called ModCo derivatives will have no effect on income.
The operating profit (EBIT) in life and health reinsurance climbed by a very pleasing 17.9% as at 30 September 2016 to EUR 290.4 million (EUR 246.3 million). The EBIT margins for the reporting categories at the end of the period under review were as follows: financial solutions business emphatically beat the 2% target with a gratifying 19.7%. The EBIT margin in longevity solutions similarly surpassed the target margin of 2% to reach 2.4%. Mortality and morbidity fell short of the targeted 6% at 4.3%. Group net income grew by a pleasing 17.5% to EUR 208.9 million (EUR 177.8 million). Earnings per share amounted to EUR 1.73 (EUR 1.47).
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