Annual Report 2017

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10 year overview
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Business development
Property & Casualty reinsurance Life & Health reinsurance Investments Total result
Overall assessment of the business position Results of operations
Property & Casualty reinsurance Life & Health reinsurance Investments
Financial position and net assets
Investment policy Investments Analysis of the capital structure Management of policyholders’ surplus Group shareholders’ equity Financing and Group debt Analysis of the consolidated cash flow statement Financial strength ratings Information pursuant to § 315
Information on Hannover Rück SE
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Group non-financial information statement
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Opportunity and risk report
Risk report
Strategy implementation Major external factors Risk capital Risk management Risk management system Internal control system Risk landscape of Hannover Re Internal risk assessment Underwriting risks in property and casualty reinsurance Underwriting risks in life and health reinsurance Market risks Counterparty default risks Operational risks Other risks
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Remuneration report
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Outlook
Forecast
Economic developments Property & Casualty reinsurance Life & Health reinsurance Investments Outlook 2018
Consolidated balance sheet Statement of income Statement of comprehensive income Statement of changes in shareholders’ equity Cash flow statement Notes Auditor's report Responsibility statement
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Global presence Strategic business groups History

Total result

The gross premium in our total business increased by 8.8% as at 31 December 2017 to EUR 17.8 billion (EUR 16.4 billion). Growth of 11.2% would have been booked at constant exchange rates. We thus surpassed our guidance, which had initially anticipated an increase in the low single-digit percentage range and was ultimately raised to more than 5% over the course of the year. The level of retained premium climbed to 90.5% (89.3%). Net premium earned rose by 8.5% to EUR 15.6 billion (EUR 14.4 billion). At unchanged exchange rates the increase would have been 10.8%.

The operating profit (EBIT) fell by 19.2% to EUR 1,364.4 million (EUR 1,689.3 million) owing to the above-average burden of large losses. Group net income contracted year-on-year to EUR 958.6 million (EUR 1,171.2 million). We thus comfortably outperformed the revised guidance of EUR 800 million issued with the quarterly statement for the third quarter owing to the hurricane events. Earnings per share for the Hannover Re Group stood at EUR 7.95 (EUR 9.71).

The equity position remains highly robust: the equity attributable to shareholders of Hannover Re totalled EUR 8.5 billion (EUR 9.0 billion) as at 31 December 2017. The return on equity amounted to a good 10.9% (13.7%). The book value per share reached EUR 70.72 (EUR 74.61). In view of the exceptionally heavy losses incurred in the year under review, the forecasts provided for the 2017 financial year as shown in the following table “Business development in the year under review” were only partially achievable.

The total policyholders’ surplus, consisting of shareholders’ equity, non-controlling interests and hybrid capital, amounted to EUR 10.8 billion (EUR 11.2 billion) as at 31 December 2017.

With the publication of the annual financial statement we are also releasing the capital adequacy ratio of the Hannover Re Group calculated in accordance with the requirements of Solvency II. It increased relative to the previous year to reach a level of 260% as at 31 December 2017 (31 December 2016: 230%).

Business development in the year under review
Forecast 2017Target attainment 2017
Gross premium growth (Group)Growth in the low single-digit percentage range or > 5,0% 1, 2+11.2% at constant exchange rates
+8.8% not adjusted for currency effects
Gross premium growth for
Property & Casualty reinsurance		slight growth 1+18.7% at constant exchange rates
+16.4% not adjusted for currency effects
Gross premium growth for
Life & Health reinsurance		moderate growth 1, 3+1.4% at constant exchange rates
-1.0% not adjusted for currency effects
Return on investment 42.7% or > 3.0% 53,8%
Group net income> EUR 1 billion or around EUR 800 million 6, 7EUR 958.6 million
  • 1 At constant exchange rates
  • 2 In the context of publication of the half-yearly financial report the guidance for gross premium growth (Group) was raised to more than 5.0%.
  • 3 Organic growth only
  • 4 Excluding ModCo derivatives
  • 5 In the context of publication of the quarterly statement as at 30 September 2017 the guidance for the return on investment was raised to more than 3.0%.
  • 6 Assuming stable capital markets and / or major loss expenditure in 2017 that does not exceed EUR 825 million
  • 7 In the context of publication of the quarterly statement as at 30 September 2017 the guidance for Group net income was revised to around EUR 800 million.
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Property & Casualty reinsurance Life & Health reinsurance Investments Group shareholders’ equity

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