Business development

• Currency-adjusted growth in gross premium better than forecast
• Very good Group net income despite unusually high burden of large losses
• Property and casualty reinsurance falls short of previous year owing to natural catastrophe losses
• Life and health reinsurance adversely impacted by parts of the existing US mortality portfolio
• Investment income comfortably beats return expectations
• Return on equity: 10.9%

The development of business in 2017 was shaped by exceptionally heavy losses in the third quarter. As a result, the large loss budget of EUR 825 million that we had earmarked for the full year had already been exceeded as at 30 September 2017. Further large losses in the fourth quarter pushed the total expenditure higher to altogether EUR 1,127.3 million.

It is therefore all the more pleasing that we were able to generate very good Group net income of EUR 958.6 million. While this is lower than our original guidance of more than EUR 1 billion, it clearly exceeds the EUR 800 million that we had forecast in November 2017. This performance should also be viewed extremely favourably in comparison with our competitors. Our result was assisted by exceptionally gratifying investment income as well as by the release of reserves established for loss events of prior years that were no longer required.

Please find below a brief summary of the development of our two business groups – Property & Casualty and Life & Health reinsurance – and our investments. More detailed information is to be found in chapter "Results of operation".