Annual Report 2017

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10 year overview
Stock markets Share performance Dividend Annual General Meeting Investor relations activities Sustainability reporting and ratings Shareholding structure Analyst ratings Share data
Foundations of the Group
Business model Management system
Value-based management Operational management system
Research and development
Report on economic position
Macroeconomic climate and industry-specific environment
Macroeconomic climate Industry-specific environment
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
Results of operations Development of the individual lines of business Assets and financial position Risks and opportunities Other information Outlook
Group non-financial information statement
Introduction Description of the business model Group and sustainability strategy Responsible enterprise management Compliance Stakeholder dialogue Sustainable insurance solutions ESG criteria in asset management Customer orientation and satisfaction Executive development / Employee advancement Employee retention Diversity
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
Opportunity report
Overall assessment by the Executive Board
Enterprise management
Declaration on Corporate Governance
Corporate Governance Declaration of Conformity Further enterprise management principles Working practice of the Executive Board and Supervisory Board Compliance Risk monitoring and steering
Remuneration report
Remuneration Executive Board Remuneration Supervisory Board Loans to members of the management boards and contingent liabilities Securities transactions and shareholdings Remuneration of staff and senior executives
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
Report of the Supervisory Board Supervisory Board Members
Global presence Strategic business groups History

5. Segment reporting

Based on the “management approach” of IFRS 8, which requires segment information to be presented as it is reported internally to management and normally used by the chief operating decision maker to decide upon the allocation of resources to a segment and evaluate its performance, Hannover Re has identified the reportable segments of property & casualty reinsurance and life & health reinsurance. With regard to the object of business operations within the two segments please see the corresponding remarks in the management report.

The segment information shown follows the system used for internal reporting purposes, on the basis of which the full Executive Board regularly evaluates the performance of segments and decides on the allocation of resources to them.

The “Consolidation” column includes not only the elimination of cross-segment transactions but also, more significantly, companies whose business operations cannot be unambiguously allocated to property and casualty reinsurance or life and health reinsurance. These are principally the service and financing companies belonging to the Group.

During the financial year no material changes occurred in the organisational structure that could have influenced the composition of the segments. Since the performance indicators used to steer the segments correspond to the system according to which the consolidated financial statement is prepared, a separate reconciliation of the segment results with the Group result is not provided.

All companies consolidated for the first time or deconsolidated in 2017 are allocated to the property and casualty reinsurance segment.

Table as Excel file: 
Consolidated segment report
Segmentation of assets Property and casualty reinsurance Life and health reinsuranceConsolidationTotal
in EUR thousand 31.12.2017 31.12.2016 31.12.201731.12.2016 131.12.201731.12.2016 131.12.201731.12.2016 1
Assets
Fixed-income securities – held to maturity 259,284 342,793 71,898134,0455,0008,117336,182484,955
Fixed-income securities – loans and receivables 2,417,894 2,539,270 37,27024,324––2,455,1642,563,594
Fixed-income securities – available for sale 23,662,710 24,337,185 7,617,1137,831,8892,08513,09931,281,90832,182,173
Equity securities – available for sale 37,520 905,307 ––––37,520905,307
Financial assets at fair value through profit or loss 56,652 73,352 244,222224,230––300,874297,582
Other invested assets 3,612,795 3,391,140 189,441210,41349,21970,6773,851,4553,672,230
Short-term investments 342,744 259,598 615,925565,899–13,490958,669838,987
Cash and cash equivalents 610,585 579,112 213,065267,62312,0561,932835,706848,667
Total investments and cash under own management 31,000,184 32,427,757 8,988,9349,258,42368,360107,31540,057,47841,793,495
Funds withheld 1,636,993 1,263,533 9,098,01910,409,726––10,735,01211,673,259
Contract deposits (121) (105) 167,975170,610––167,854170,505
Total investments 32,637,056 33,691,185 18,254,92819,838,75968,360107,31550,960,34453,637,259
Reinsurance recoverables on unpaid claims 1,443,869 1,250,770 207,660255,716(194)(194)1,651,3351,506,292
Reinsurance recoverables on benefit reserve – – 959,5331,189,420––959,5331,189,420
Prepaid reinsurance premium 96,383 133,858 191,069––96,402134,927
Reinsurance recoverables on other reserves 1,269 3,590 6,0328,641––7,30112,231
Deferred acquisition costs 841,911 758,429 1,386,3351,505,605––2,228,2462,264,034
Accounts receivable 2,458,038 2,130,342 1,363,6101,547,740(524)(52)3,821,1243,678,030
Other assets in the segment 1,351,426 1,115,251 792,297723,648(671,162)(681,631)1,472,5611,157,268
Assets held for sale – 15,086 –––––15,086
Total assets 38,829,952 39,098,511 22,970,41425,070,598(603,520)(574,562)61,196,84663,594,547
            
Segmentation of liabilities
in EUR thousand
Liabilities
Loss and loss adjustment expense reserve 24,130,443 24,010,367 4,248,2964,119,245(194)(194)28,378,54528,129,418
Benefit reserve – – 8,977,94610,313,952––8,977,94610,313,952
Unearned premium reserve 3,332,083 3,171,056 209,111211,442––3,541,1943,382,498
Provisions for contingent commissions 162,620 127,865 231,840234,525––394,460362,390
Funds withheld 400,290 456,877 574,496777,196––974,7861,234,073
Contract deposits 72,056 (3,628) 3,877,1514,301,971––3,949,2074,298,343
Reinsurance payable 512,372 675,669 467,869539,581–786980,2411,216,036
Long-term liabilities 250,122 313,378 ––1,491,9511,490,8401,742,0731,804,218
Other liabilities in the segment 1,948,148 2,150,083 1,705,8641,659,712(682,176)(696,723)2,971,8363,113,072
Total liabilities 30,808,134 30,901,667 20,292,57322,157,624809,581794,70951,910,28853,854,000
1 Restated pursuant to IAS 8 (cf. section 3.1)
Table as Excel file: 
Consolidated segment report
Segment statement of income Property and casualty reinsurance Life and health reinsurance Consolidation Total
in EUR thousand 1.1. – 31.12.2017 1.1. – 31.12.2016 1.1. – 31.12.2017 1.1. – 31.12.2016 1 1.1. – 31.12.2017 1.1. – 31.12.2016 1.1. – 31.12.2017 1.1. – 31.12.2016 1
Gross written premium 10,710,944 9,204,554 7,079,562 7,149,023 – 45 17,790,506 16,353,622
thereof
From insurance business with other segments – – – (45) – 45 – –
From insurance business with external third parties 10,710,944 9,204,554 7,079,562 7,149,068 – – 17,790,506 16,353,622
Net premium earned 9,158,732 7,985,047 6,472,779 6,425,048 159 181 15,631,670 14,410,276
Net investment income 1,209,298 900,919 560,597 638,898 3,994 10,603 1,773,889 1,550,420
thereof
Change in fair value of financial instruments 2,069 2,452 36,500 23,702 – (88) 38,569 26,066
Total depreciation, impairments and appreciation of investments 70,905 75,997 44 31 – – 70,949 76,028
Income / expense on funds withheld and contract deposits 17,789 24,031 217,126 308,118 – – 234,915 332,149
Claims and claims expenses 6,526,236 5,330,662 5,666,843 5,480,293 – 370 12,193,079 10,811,325
Change in benefit reserve – – (571) 82,988 – 22 (571) 83,010
Commission and brokerage, change in deferred acquisition costs and other technical
income / expenses		 2,434,368 1,975,912 1,081,775 1,022,547 227 2 3,516,370 2,998,461
Administrative expenses 200,440 199,380 210,708 201,973 149 192 411,297 401,545
Other income and expenses (86,789) (39,720) 170,589 67,122 (4,829) (4,409) 78,971 22,993
Operating profit / loss (EBIT) 1,120,197 1,340,292 245,210 343,267 (1,052) 5,789 1,364,355 1,689,348
Interest on hybrid capital – – – – 71,736 71,693 71,736 71,693
Net income before taxes 1,120,197 1,340,292 245,210 343,267 (72,788) (65,904) 1,292,619 1,617,655
Taxes 203,117 339,064 66,294 86,522 (21,369) (34,357) 248,042 391,229
Net income 917,080 1,001,228 178,916 256,745 (51,419) (31,547) 1,044,577 1,226,426
thereof
Non-controlling interest in profit or loss 79,740 51,337 6,282 3,860 – – 86,022 55,197
Group net income 837,340 949,891 172,634 252,885 (51,419) (31,547) 958,555 1,171,229
1 Restated pursuant to IAS 8 (cf. section 3.1)              
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