Group and sustainability strategy

Our Group strategy encompasses ten strategic principles that apply to all business units and help to ensure realisation of our vision for the strategy cycle 2015 to 2017 “Long-term success in a competitive business”. The objectives of our Group strategy are pursued in accordance with our holistic management system Performance Excellence 2.0. Based on the Excellence Model of the European Foundation for Quality Management (EFQM), this requires each organisational unit of our Group to define and explore its contribution to the Group strategy. In this way, we ensure that all initiatives and measures within our Group are rigorously linked to the corporate strategy. Indicators for the status of target attainment are mapped centrally in our Target Matrix. For further details please see the section “Value-based management” of the Group management report.

Group Strategy 2015-2017

1. We have ambitious profit and growth targets
   • Generate an IFRS return on equity of at least 900 basis points above the risk-free interest rate
   • Achieve profitability targets and generate a profit clearly in excess of the cost of capital
   • Grow the premium volume (by more than the market average)
   • Outperform the Global Reinsurance Index (GloRe) over a three-year period
   • Consistently pay an attractive dividend

    

2. We are a preferred business partner
   • Offer an attractive value proposition that makes us the preferred business partner for our clients
   • Foster customer relationships to both parties’ mutual benefit irrespective of the size of the account

 

3. We aim for successful employees
   • Offer attractive workplaces
   • Foster the qualifications, experience and commitment of our staff

 

4. We strive for an optimal balance between stability and yield of our investments
   • Achieve the target return – risk-free interest rate plus cost of capital

 

5. We manage risks actively
   • Ensure protection of capital through quantitative risk management
   • Ensure protection of capital through qualitative risk management

 

6. We maintain an adequate level of capitalisation
   • Ensure that requirements for equity resources (economic capital model, solvency regulations etc.) are met
   • Optimise the overall cost of capital

 

7. We ensure low costs through an efficient organisational set-up
   • Ensure a lower expense ratio than our competitors

 

8. We use information technology to achieve a competitive advantage
   • Information and communication systems assure optimal support for business processes in light of cost / benefit considerations

 

9. We are committed to sustainability, integrity and compliance
   • Ensure conformity with all legal requirements
   • Encourage sustainable actions with respect to all stakeholders
   • Support considered and pragmatic principles of corporate governance and recognise their central role in guiding our activities

 

10. We strive for Performance Excellence and continuous improvement
    • Ensure the rigorous derivation of strategic objectives across all areas of the company

As enshrined in Item 9. of the Group strategy, sustainability forms an integral part of our actions. Our goal is to harmonise our business operations with environmental and social requirements. To do this, we have developed a sustainability strategy that complements the guiding model of our Group strategy. This defines four actions fields, concrete goals and measures, while also taking into account the major requirements and interests of our stakeholders. Of particular relevance here are our customers, our investors and our employees.

Responsibility for the topic of sustainability rests with the full Executive Board of Hannover Rück SE. The sustainability strategy, goals and measures are reviewed and approved by the Executive Board. In view of the Group’s decentralised organisational structure, sustainability measures are implemented directly on the level of the various specialist units. The coordination of goals and measures as well as the collection of data for reporting purposes are handled by an interdisciplinary team composed of representatives of all relevant business units.

With a view to identifying significant non-financial topics, we conducted a materiality analysis as required for reporting purposes in accordance with the Global Reporting Initiative (GRI). To this end, an internal workshop was held at which representatives of all relevant specialist units were called upon to specify important issues in relation to Hannover Re’s business operations. A stakeholder survey was also carried out in cooperation with an external partner. The issues identified as material by stakeholders and from the company’s perspective were subsequently sorted and weighted with the aid of a scoring system in order to determine materiality. In total, we identified 15 material sustainability issues, on which we have reported since 2011 on a voluntary basis in our annual Sustainability Report.

These issues dovetail to some extent with the topics to be reported on under the CSR Directive Implementation Act. In the process of preparing the non-financial information statement, the legally required dimensions of “business relevance” and “impacts” were factored into the determination of materiality. As a first step, the 15 material issues identified for the sustainability strategy were evaluated on a scale of 0 to 5 with an eye to their business relevance to the non-financial aspects of the CSR Directive Implementation Act. We consider issues rated 3.3 and higher to be material for our company within the meaning of this legislation. In a second step, the issues pinpointed by this evaluation as material were rated – again using the aforementioned points scale – according to their direct and indirect impacts on the non-financial aspects. All issues rated 3.3 or higher were included and form the content of our non-financial information statement. The matrix below compares the reportable aspects with the issues that we identified as material within the meaning of the CSR Directive Implementation Act and highlights thematic overlaps.

The material topics as defined by the CSR Directive Implementation Act are discussed below.