Annual Report 2017

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10 year overview
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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

7.2 Investment income

Table as Excel file: 
Investment income
in EUR thousand20172016
Income from real estate171,447142,956
Dividends22,29027,481
Interest income934,802943,682
Other investment income160,49447,857
Ordinary investment income1,289,0331,161,976
Profit or loss on shares in associated companies16,0069,101
Appreciation912294
Realised gains on investments447,969294,017
Realised losses on investments70,87687,721
Change in fair value of financial instruments38,56926,066
Impairments on real estate48,99531,966
Impairments on equity securities3,68130,141
Impairments on fixed-income securities309689
Impairments on participating interests and othe financial assets18,87613,526
Other investment expenses110,778109,140
Net income from assets under own management1,538,9741,218,271
Interest income on funds withheld and contract deposits372,726453,643
Interest expense on funds withheld and contract deposits137,811121,494
Total investment income1,773,8891,550,420

Of the impairments totalling EUR 40.8 million (EUR 47.4 million), an amount of EUR 18.0 million (EUR 3.1 million) was recognised on real estate and real estate funds. Impairments of EUR 3.7 million (EUR 30.1 million) were attributable to equities or equity funds because their fair values had fallen either significantly (by at least 20%) or for a prolonged period (for at least nine months) below acquisition cost. Impairment losses of EUR 8.4 million (EUR 11.7 million) were taken on alternative investments. The impairments taken on fixed-income securities amounted to just EUR 0.3 million (EUR 0.7 million). In addition, impairment losses of EUR 10.4 million (EUR 1.9 million) were recognised on our investments in participating interests.

These write-downs contrasted with write-ups of EUR 0.9 million (EUR 0.3 million).

The portfolio did not contain any overdue, unadjusted assets as at the balance sheet date since overdue securities are written down immediately.

Interest income on investments
in EUR thousand20172016
Fixed-income securities – held to maturity13,80325,280
Fixed-income securities – loans and receivables80,32496,696
Fixed-income securities – available for sale803,855798,618
Financial assets – at fair value through profit or loss11,5153,188
Other25,30519,900
Total934,802943,682

The net gains and losses on investments held to maturity, loans and receivables and the available-for-sale portfolio shown in the following table are composed of interest income, realised gains and losses as well as impairments and appreciation. In the case of the fixed-income securities at fair value through profit or loss designated in this category and the other financial assets, which include the technical derivatives, income and expenses from changes in fair value are also recognised.

Making allowance for the other investment expenses of EUR 110.8 million (EUR 109.1 million), net income from assets under own management of altogether EUR 1,539.0 million (EUR 1,218.3 million) was recognised in the year under review.

Table as Excel file: 
Net gains and losses on investments
2017
in EUR thousandOrdinary
investment
income 1		Realised gains
and losses		Impairments / appreciationChange in
fair value		Net income from
assets under own
management 2
Held to maturity
Fixed-income securities12,147(18)––12,129
Loans and receivables
Fixed-income securities76,3392,794––79,133
Available for sale
Fixed-income securities772,776129,982309–902,449
Equity securities20,565226,5023,681–243,386
Other invested assets254,20216,99821,342–249,858
Short-term investments20,71141––20,752
At fair value through profit or loss
Fixed-income securities11,936––7,80919,745
Other financial assets–––2,9722,972
Other invested assets–(5,915)–2,449(3,466)
Other136,3636,70945,61725,339122,794
Total1,305,039377,09370,94938,5691,649,752
  • 1 Including income from associated companies, for reconciliation with the consolidated statement of income
  • 2 Excluding other investment expenses
Table as Excel file: 
Net gains and losses on investments
2016
in EUR thousandOrdinary
investment
income 1		Realised gains
and losses		Impairments
/ appreciation		Change in
fair value		Net income from
assets under own
management 2
Held to maturity
Fixed-income securities23,486(8)––23,478
Loans and receivables
Fixed-income securities95,8582,841––98,699
Available for sale
Fixed-income securities744,783161,068668–905,183
Equity securities21,1527,06030,141–(1,929)
Other invested assets138,30236,08615,342–159,046
Short-term investments15,41435––15,449
At fair value through profit or loss
Fixed-income securities3,622––(9,458)(5,836)
Other financial assets–––15,17715,177
Other invested assets–1,588–3,6525,240
Other128,460(2,374)29,87716,695112,904
Total1,171,077206,29676,02826,0661,327,411
  • 1 Including income from associated companies, for reconciliation with the consolidated statement of income
  • 2 Excluding other investment expenses
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