Results of operations
The 2015 financial year passed off highly satisfactorily for Hannover Rück SE. The gross premium of Hannover Rück SE in total business increased by 30.1% to EUR 14.1 billion (previous year: EUR 10.9 billion). The level of retained premium contracted from 79.3% to 73.0%. Net premium earned grew by 20.0% to EUR 10.2 billion (EUR 8.5 billion).
The underwriting result for total business (before changes in the equalisation reserve) improved in the year under review from -EUR 15.0 million to EUR 158.4 million. An amount of EUR 136.1 million (EUR 277.6 million) was allocated to the equalisation reserve and similar provisions.
| Condensed profit and loss account of Hannover Rück SE | ||
| in EUR thousand | 2015 | 2014 |
|---|---|---|
| Earned premiums, net of retrocession | 10,178,602 | 8,481,296 |
| Allocated investment return transferred from the non-technical account, net of retrocession | 328,840 | 442,194 |
| Other technical income, net of retrocession | 15 | 23 |
| Claims incurred, net of retrocession | 7,222,016 | 6,801,306 |
| Changes in other technical provisions, net of retrocession | (1,020,247) | 166,116 |
| Bonuses and rebates, net of retrocession | (12) | 48 |
| Operating expenses, net of retrocession | 2,105,799 | 2,301,759 |
| Other technical charges, net of retrocession | 1,056 | 1,533 |
| Subtotal | 158,351 | (15,017) |
| Change in the equalisation reserve and similar provisions | (136,129) | (277,646) |
| Net technical result | 22,222 | (292,663) |
| Investment income | 1,862,593 | 1,739,563 |
| Investment charges | 166,675 | 158,722 |
| Allocated investment return transferred to the technical account | (532,949) | (567,810) |
| Other income | 160,761 | 161,566 |
| Other charges | 281,979 | 284,151 |
| Profit or loss on ordinary activities before tax | 1,063,973 | 597,783 |
| Taxes on profit and income and other taxes | 158,172 | 176,546 |
| Profit for the financial year | 905,801 | 421,237 |
| Profit brought forward from previous year | 2,462 | 94,208 |
| Allocations to other retained earnings | 250,263 | 445 |
| Disposable profit | 658,000 | 515,000 |
Major loss expenditure in the year under review was higher than in 2014. Although the hurricane season once again passed off unremarkably, a number of natural catastrophe events and other large losses were recorded. The explosion in the port of the Chinese city of Tianjin was the largest single loss for Hannover Rück SE, resulting in net loss expenditure of EUR 43.1 million. In addition, damage to an oil rig in the Gulf of Mexico and a storm in Japan led to losses of EUR 29.6 million and EUR 23.2 million respectively. The total net expenditure incurred by Hannover Rück SE from large losses was EUR 330.6 million (EUR 257.0 million).
Ordinary investment income including deposit interest clearly exceeded the previous year’s level to reach EUR 1,737.8 million (EUR 1,589.6 million). This was due principally to higher distributions from our investment holding companies. Our exposure to high-yield fund investments was also a very pleasing factor here. Net gains of EUR 94.0 million (EUR 104.0 million) were realised on disposals. Write-downs of EUR 83.2 million (EUR 92.9 million) were taken on investments. They were attributable almost exclusively to bearer debt securities held as current assets. The write-downs contrasted with write-ups of EUR 5.1 million (EUR 30.5 million) that were made on assets written down in previous periods in order to reflect increased fair values.
All in all, our net investment result improved to EUR 1,695.9 million (EUR 1,580.8 million).
The profit on ordinary activities increased to EUR 1,064.0 million (EUR 597.8 million). The year under review closed with a profit for the year of EUR 905.8 million (EUR 421.2 million).
