5.2 Disposals and discontinued operations
Effective 3 March 2008 HRBV, which is wholly owned by Hannover Re, reached agreement with a third party outside the Group on the sale of 1% of its stake in E+S Rück – by way of a share reduction without a change of control status – in order to intensify the business relations. In the capital consolidation as at the balance sheet date this transaction was recognised directly in equity. Please see our explanatory remarks in Section 3.1 "Change in accounting policies".
Effective 30 December 2008 Hannover Re sold its interest of 43.7% in ITAS Assicurazioni S.p.A. at book value. The proceeds from the sale totalled altogether EUR 26.4 million and were rendered in the form of a cash component amounting to EUR 7.4 million and a transfer of E+S Rück shares held by the purchaser worth EUR 19.0 million. Hannover Re transferred these shares to HRBV by way of a capital increase for a non-cash contribution. Please see our explanatory remarks in Section 5.1 "Acquisitions and new formations".
After Hannover Re had already paid out the paid-in capital of WRH Offshore High Yield Partners L.P. in the 2007 financial year and during the third quarter of 2008 by way of two distribution resolutions, the company's application for cancellation was filed on 17 December 2008. Deconsolidation of the company gave rise to a loss of altogether EUR 13.6 million, of which EUR 12.1 million was attributable to Hannover Re.
In the 2006 financial year Hannover Re reached agreement on the sale of its American subgroup Praetorian Financial Group, Inc., New York (PFG), to an Australian insurance group. Effective 31 May 2007 beneficial ownership of the assets and liabilities belonging to the subgroup classified in the previous periods as discontinued operations was transferred. They were therefore no longer recognised as at the balance sheet date. In compliance with IFRS 5 "Non-Current Assets Held for Sale and Discontinued Operations", we recognise the profit or loss of PFG in the consolidated statement of income for the previous period after tax in a separate line.
The profit or loss and net cash flows of the discontinued operations for the comparative period of the previous year are presented in the following tables and broken down into their major components.
Excel download (20 KB)Major items in the statement of income of the discontinued operations
| Figures in EUR thousand | 2008 | 2007 |
|---|---|---|
| Gross written premium | – | 287,114 |
| Ceded written premium | – | 318,152 |
| Net change in gross unearned premium | – | 178,494 |
| Net premium earned | – | 147,456 |
| Net investment income | – | 20,444 |
| Net underwriting result | – | 11,430 |
| Other income and expenses | – | (7,075) |
| Operating profit/loss (EBIT) | – | 24,799 |
| Interest on hybrid capital | – | 2,283 |
| Net income before taxes | – | 22,516 |
| Taxes | – | 11,048 |
| Acquirer's share of current income from discontinued operations | – | 12,833 |
| Group share of current income from discontinued operations | – | 11,468 |
| Income/loss from deconsolidation (after taxes) | – | 23,617 |
| Net income | – | 35,085 |
Statement of cash flows from the discontinued operations
| Figures in EUR thousand | 2008 | 2007 |
|---|---|---|
| Cash flow from operating activities | – | 172,834 |
| Cash flow from investing activities | – | (18,125) |
| Change in cash and cash equivalents | – | 154,709 |