Hannover Re: the somewhat different reinsurer

Transcription

Hannover Re: the somewhat different reinsurer
January 2017
Content
01 – 18
|
Overview
19 – 26
|
Hannover Re Group
27 – 38
|
Property & Casualty reinsurance
39 – 46
|
Life & Health reinsurance
47 – 54
|
Investment management
55 – 57
|
Risk management
58 – 66
|
Capital management
67 – 76
|
Interim Results Q1-3/2016
77 – 81
|
Outlook
I – VI
|
Appendix
Overview
Overview
Hannover Re Group
Property & Casualty R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Key facts about Hannover Re
Today
Majority shareholder:
50.2% held by Talanx AG*
18 Feb 2004
Second Public Offering
30 Nov 1994
More than 100 subsidiaries, branches and
representative offices worldwide
Total staff of roughly 2,500 employees
Initial Public Offering
1990
Life & Health reinsurance as
a strategic growth segment
1966

Foundation by HDI as a subsidiary

* Majority shareholder HDI V.a.G.
1
More than 5,000 insurance clients in about
150 countries
Outlook
Appendix
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
From in-house reinsurer to global player
>100 subsidiaries, branches/representative offices in ~20 countries
2009: Opening of an office in Shanghai, China
2007: Branches and representative offices in Brazil, Colombia, Korea and Shanghai
2006: Hannover Re Takaful B.S.C., Bahrain
2001: Hannover Re (Bermuda) Ltd., Bermuda
2000: Clarendon Insurance Group, USA
1997: Selected portfolios of Skandia International
Insurance Company (France, Great Britain,
Mexico, Sweden, Spain)
1996: E+S Rückversicherung AG, Germany
1996: Hannover Rück SE Malaysian Branch, Malaysia
1992: Hannover Reinsurance (Ireland) Ltd., Ireland
1990: Hamburger Internationale Rückversicherungs-AG
1990: Reassurance Company of Hannover, USA
(today: Hannover Life Reassurance Company of America)
1981: Hollandia-Group; South Africa (today: Hannover Reinsurance Group Africa)
1980: Hannover Rück SE Canadian Branch, Canada
1979: International Insurance Company of Hannover, Great Britain
2
Q1-3/2016
Outlook
Appendix
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Group structure supports our business model
Majority owner, but operational and financial independence
Talanx AG*
50.2%
Free float
49.8%
64.8%
>100 subsidiaries,
branch/rep. offices
in ~20 countries
8 German
primary insurers
Domestic business
* Majority shareholder HDI V.a.G.
3
International business
Q1-3/2016
Outlook
Appendix
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Executive Board of Hannover Rück SE
Ulrich Wallin
Chairman
Roland Vogel
Finance and Accounting,
Information Technology,
Investment and Collateral
Management,
Facility Management
Business Opportunity
Management, Compliance,
Controlling,
Human Resources Management,
Internal Auditing,
Risk Management,
Corporate Development,
Corporate Communications
Claude Chèvre
Dr. Klaus Miller
Dr. Michael Pickel
Sven Althoff
Jürgen Gräber
Life & Health Reinsurance:
Africa, Asia, Australia/New
Zealand, Latin America,
Western
and Southern Europe,
Longevity Solutions
Life & Health Reinsurance:
United Kingdom/
Ireland, North America,
Northern, Eastern and
Central Europe
Group Legal Services,
Run-Off Solutions,
Target Markets in Property
& Casualty
Reinsurance:
North America, Continental
Europe
Specialty Lines
Worldwide:
Marine, Aviation,
Credit, Surety and
Political Risks,
United Kingdom, Ireland,
London Market and
Direct Business,
Facultative Reinsurance
Global Reinsurance:
Worldwide Treaty
Reinsurance, Cat XL,
Structured Reinsurance
and Insurance-Linked
Securities,
Coordination of Property &
Casualty Business Group,
Quotations, Retrocessions
From left: Roland Vogel, Ulrich Wallin, Claude Chèvre, Dr. Klaus Miller, Sven Althoff, Dr. Michael Pickel, Jürgen Gräber
4
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We are among the top reinsurers in the world
Premium ranking 2015 in m. USD
Rank Group
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Munich Re
Swiss Re
Hannover Re
SCOR
Lloyd's 2)
Berkshire Hathaway Inc.
RGA
China Re
Everest Re
PartnerRe
Korean Re
Great West Lifeco
Transatlantic Holdings
General Insurance Corporation of India
XL Group
For further information please see A.M. Best “Best’s Special Report” (September 2016)
1) Net premium earned
2) Reinsurance only
n.a. = not available at time of publication
5
Country
DE
CH
DE
FR
UK
US
US
CN
BM
BM
KR
CA
US
IN
IE
GWP
NPW
36,976
32,249
18,651
14,665
12,740
12,236
9,371
8,283
5,876
5,548
5,443
4,173
3,662
2,786
2,583
35,2791)
30,442
15,9451)
13,228
10,237
12,236
n.a.
7,546
5,378
5,230
3,739
4,065
3,387
2,474
2,091
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Property & Casualty reinsurance in a global perspective
Hannover Re outperforms the market
Market size and concentration 2015
2011
2015
Δ
CAGR
Top 10
67
84
+17
+5.7%
Top 11 - 50
39
41
+2
+1.5%
Other
64
65
+1
+0.4%
R/I market
170
190
+20
+2.8%
Hannover Re
6.8
9.3
+2.5
+8.1%
in bn. EUR
Other
34%
Top 10
44%
Top 11 - 50
22%
Source: Own research (global market size based on estimate of total ceded premiums by primary insurers)
Top 10: Munich Re, Swiss Re, Lloyd’s, Hannover Re, Berkshire, SCOR, China Re, PartnerRe, Everest Re, KoreanRe
Further increase of Top 10's share
6
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Life & Health reinsurance in a global perspective
Development of Hannover Re in line with market development
Market size and concentration 2015
Top 11 - 50
4%
2011
2015
Δ
CAGR
Top 5
37
50
+14
+8.3%
Top 6 - 10
9
15
+6
+12.7%
Top 11 - 50
3
3
+0
+0.0%
R/I market
49
68
+19
+8.8%
Hannover Re
5.3
7.7
+2.5
+10.1%
in bn. EUR
Top 6 - 50
26%
TopTop
55
7574%
%
Top 10
96%
Source: Own research
Top 10: Munich Re, Swiss Re, RGA, Hannover Re, SCOR, Berkshire (incl. GenRe), Great West Lifeco, China Re, Korean Re, PartnerRe
Concentration on the Top 5/Top 10 continues
7
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Continued growth of both business groups
2015: +18.8%; 5-year CAGR: +8.4%
Gross written premium
in m. EUR
17,069
13,774
11,429
45%
13,963
14,362
45%
12,096
44%
44%
45%
56%
56%
55%
2012
2013
2014
44%
55%
55%
56%
2010
2011
8
2015
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Well balanced international portfolio
Gross written premium (Group)
Africa
9,289
3%
4%
3%
6%
8,259
in m. EUR
8,121
10,275
11,429
12,096
13,774
13,963
14,362
Australia
17,069
3%
6%
5%
18%
17% 1)
15%
15% 2)
Latin America
Asia
8%
Other European countries
15%
16%
Germany
37%
30%
United Kingdom
North America
2006
1) Japan 1%
2) CEE and Russia 1%
9
2007
2008
2009
2010
2011
2012
2013
2014
2015
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Hannover Re is one of the most profitable reinsurers
2011
Company
Hannover Re
Peer 1, Switzerland,
Composite
Peer 5, Bermuda,
Property & Casualty
Peer 9, Bermuda,
Property & Casualty
Peer 2, Germany,
Composite
Peer 7, France,
Composite
Peer 4, US,
Property & Casualty
Peer 8, US,
Life & Health
Peer 6, Bermuda,
Composite
Peer 3, Canada,
Property & Casualty
2012
2013
2015
2011 - 2015
RoE
Rank
RoE
Rank
RoE
Rank
RoE
Rank
RoE
Rank
avg. RoE
Rank
12.8%
1
15.4%
3
15.0%
3
14.7%
4
14.7%
1
14.5%
1
9.6%
3
13.4%
5
13.7%
4
10.5%
8
13.7%
2
12.2%
2
(1.3%)
8
12.9%
6
18.4%
1
16.6%
2
13.0%
3
11.9%
3
(2.4%)
9
15.9%
2
18.0%
2
13.7%
5
9.5%
6
10.9%
4
3.1%
6
12.6%
7
12.5%
5
11.3%
6
10.2%
5
9.9%
5
7.5%
4
9.1%
9
11.2%
6
9.6%
9
10.7%
4
9.6%
6
4.9%
5
15.2%
4
9.4%
8
9.4%
10
7.5%
8
9.3%
7
10.1%
2
9.9%
8
6.5%
9
10.6%
7
7.6%
7
8.9%
8
(7.6%)
10
16.9%
1
9.7%
7
15.3%
3
1.5%
10
7.2%
9
0.5%
7
6.2%
10
(6.7%)
10
18.3%
1
5.7%
9
4.8%
10
Top 10 of the Global Reinsurance Index (GloRe) with more than 50% reinsurance business
Data based on company data, own calculation
10
2014
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Reinsurance market conditions will improve ...
... when the RoE becomes sufficiently low
24%
Development of return on equity and Guy Carpenter Global Property Cat RoL Index
350
20%
17.3 %
300
16%
14.4 %
13.2 %
12.2 %
11.9 %
10.9 %
12%
10.4 %
9.8 %
250
9.0 %
8%
200
4.0 %
4%
*
2.2 %
0.4 %
0%
150
2005
2006
Return on equity
2007
2008
2009
2010
2011
2012
2013
2014
2015
GC Global Property Cat RoL Index
Source: Guy Carpenter
Return on equity based on company data (Top 10 of the Global Reinsurance Index (GloRe) with more than 50% reinsurance business), own calculation
* Preliminary figures for 2016
11
1H/2016
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We maintained our competitive advantage on admin. expenses
Administrative expense ratio*
3.0%
2.8%
2.8%
2.7%
2.6%
2011
2012
2013
Own calculation
* Administrative expenses + other technical expenses (in % of net premium earned)
12
2014
2015
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Accelerated value creation since 2009
10-year CAGR: +12.6%
Increase of book value and accumulated paid dividends
in EUR
95.13
28.23
23.98
17.98
20.98
15.88
13.58
11.48
9.18
7.58
7.58
21.57
24.03
27.77
2005
2006
2007
Book value per share
As at 31 December
13
11.48
23.47
2008
30.80
2009
37.39
41.22
2010
2011
Paid dividends (cumulative since 1994)
50.02
48.83
2012
2013
62.61
66.90
2014
2015
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Shareholders' equity up by 7%
Higher dividend payment and decreasing OCI offset by strong earnings
Policyholders' surplus
in m. EUR
10,239
8,947
8,768
1,986
2,233
2,238
1,732
682
642
in m. EUR
10,267
1,490
709
7,338
Change in shareholders' equity
702
1,151
337
7,551
(513)
8,068
(457)
636
6,032
5,888
2012
2013
4,971
2011
Shareholders' equity
14
7,551
8,068
2014
2015
Non-controlling interests
Hybrid
Shareholders'
equity
31.12.2014
Net
income
Dividend
payment
Change in
unrealised
gains/losses
Currency
translation
and other
Shareholders'
equity
31.12.2015
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
A superior and highly profitable reinsurer ...
Hannover Re's business model
Top rating (S&P: AA-) ensures attractive new business
Strong market positioning – one of the leading reinsurers worldwide
Generates noticeably higher profitability
on 5-year average in comparison with our peer competitors
Lean structures which lead to the lowest administrative expense ratio
compared to our peer group
De-risking and diversification measures taken to lower earnings
volatility aiming to consistently produce attractive dividends
Effective cycle management, selective and disciplined underwriting in
Increasing profitability of our countercyclical Life & Health business
... with a somewhat different approach
15
Appendix
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Our strategy: long-term success in a competitive business
Our overriding target: profit and value creation
Profitable
growth
Profit
and
value
creation
Capital
management

Premium growth on a long-term basis above market average

Minimum return on equity of at least 900 bps above “risk free” 1)

Achieve a profit in excess of the cost of capital (IVC, based on our ECM 2))

Capital management in the light of distributable excess capital to achieve
attractive RoE

A sufficient equity buffer enables us to act on available and profitable
business at all times

Lower management expenses
Cost
leadership
Shareholder
value

Competitive advantage compared to peers

Deliver a profit that is above average for the sector

Providing our clients with competitive terms

Share price to outperform weighted Global Reinsurance Index
(ISIN: DE 000 SLA 1GR 2) over a 3-year rolling period

Consistently paying a dividend that is attractive to our shareholders
1) After tax; target: 900 bps above 5-year average return of 10-year German government bonds
2) Economic Capital Model
16
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Performance promise to our customers and shareholders
Our value proposition to our
customers

Capital protection and capital management

Earnings protection in all lines of business

Supporting underwriting of new business
opportunities

Supporting product development
and pricing

Strong balance sheet and strong rating

Long-term consistent approach of
our underwriting policy

Long-term relationship with clients
Our profit targets to our
shareholders

Return on equity1)

Return on investment
~ 2.9%

Earnings per share growth
≥ 6.5%

Value creation per share2)
≥ 7.5%
1) After tax; 5-year rolling average of 10-year German government-bond rate („risk-free”)
2) Growth in book value per share incl. paid dividend
17
900 bps above
“risk free”
Overview
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Sustainability at Hannover Re
Our action fields and milestones
Sustainability Strategy 2015 - 2017
Governance and
Dialogue
► Responsible,
transparent and
value-based
enterprise
management
► Active, continuous
dialogue with our
stakeholders and
rating agencies
Product Responsibility
 Expanding the offering
of sustainable insurance
solutions related to
economical,
environmental and
social risks
 Consideration of
environmental, social
and governance criteria
in our asset
management
Employees
 Promotion of our
employees‘
health, work /
life balance and
personal
development
 Promotion of
diversity of our
staff
Environment and Society
 Reduction of CO₂ emissions
associated with our business
activities
 Measuring our suppliers by
environmental and social
standards
 Promotion of projects in the
areas of research, learning and
art as well as support of the
voluntary social engagement of
our staff
Hannover Re in FTSE4Good Index
Prime rating of oekom research, participation in various sustainability ratings
Annual publication of a sustainability report in accordance with GRI guidelines
Environmental Management System, certified according to DIN EN ISO 14001
Implementation of a Sustainability Strategy of Hannover Re
2011
18
2012
2013
2014
2015
2016
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Present on all continents
Europe
The Americas
Spain
Madrid
Ireland
Dublin
United Kingdom
London
France
Paris
Germany
Hannover
Italy
Milan
Sweden
Stockholm
Asia
Bahrain
Manama
Canada
Toronto
South Korea
Seoul
USA
Charlotte
Chicago
Denver
New York
Orlando
Japan
Tokyo
Taiwan
Taipei
Bermuda
Hamilton
China
Hong Kong
Shanghai
Mexico
Mexico City
India
Mumbai
Colombia
Bogotá
Brazil
Rio de Janeiro
19
Africa
Australia
South Africa
Johannesburg
Australia
Sydney
Malaysia
Kuala Lumpur
Property & Casualty and Life & Health reinsurance
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
HR share outperforms indices over a 3-year rolling period
Performance vs. indices
Performance comparison (incl. reinvested dividends)
240%
220%
+106%
200%
+93%
180%
160%
+48%
140%
120%
100%
80%
60%
Hannover Re
20
Global Reinsurance Index
HDAX
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
How do we calculate our return targets?
Our pricing is based 900 bps above risk free
Risk capital X
Factor
bps
Equity
Minorities
⇒
EBIT
risk free
X (900 + 110) ⇒
838
/
(1 - 0.24) ⇒
1,103
700
X (900 + 110) ⇒
71
/
(1 - 0.24) ⇒
93
/
(1 - 0.0)
⇒
71
1,500
Valuation adj.
2,600
X
470
13,100
MRC (EBIT / risk capital)
Risk free
Minimum Return on Capital (MRC) spread
As at September 2015; risk capital, net income and EBIT: figures in m. EUR
21
(1 - tax)
8,300
Hybrid
Total
⇒ Net income /
909
1,267
9.7%
- 1.3%
8.4%
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
How do we calculate the capital margin ...
... for our underwriters and our investment decisions?
Risk
X
capital
MRC
/
Admin.
Total margin
Capital margin
NPE ⇒ above risk-free + and other = above risk-free
expenses*
(pre-tax)
(pre-tax)
38.0%
P&C
reinsurance
4,990 X
8.6% /
8,000 ⇒
5.4%
+
3.7%
=
9.1%
L&H
reinsurance
22.5%
2,950 X
7.9% /
6,100 ⇒
3.8%
+
4.3%
=
8.1%
1.1%
+
0.1%
=
1.2%
AuM
Investment
management
39.5%
5,185 X
8.6% / 40,100 ⇒
As at September 2015; risk capital and net premium earned: figures in m. EUR
* E.g. expenses for the company as a whole
22
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Strong earnings track record since 2009
Record EPS in 2015
Operating profit (EBIT)
in m. EUR
1,755
1,394
820
1,142
928
1,178
1,466
1,229
841
148
2006
2007
2008
2009
2010
2011
2012
2013
2014
Earnings per share (EPS)
2015
in EUR
9.54
5.98
6.08
6.21
23
2007
(1.05)
2008
2009
2010
7.43
2012
2013
8.17
5.02
4.27
2006
7.04
2011
2014
2015
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Increasing ordinary dividend reflects improved earnings power
Payout: EUR 3.25 ordinary + EUR 1.50 special dividend per share
Dividend per share
Payout ratio:
[38%]
[38%]
in EUR
[-]
[35%]
[37%]
[42%]
[43%]
[40%]
[52%]
[50%]
4.75
4.25
1.50
1.25
3.00
3.00
0.40
2.30
2.10
2.30
2.10
0.50
1.60
3.00
2.60
3.25
1.80
2006
2007
Dividend per share
24
2008
2009
Special dividend per share
2010
2011
2012
2013
2014
2015
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Yearly Total Shareholder Return (TSR) of 13.2%
Value creation since IPO
+1,245%
in m. EUR
2014
2015
Market capitalisation as of date
9,041
12,741
- Market capitalisation at IPO
(Nov 1994)
1,084
1,084
+ Dividend payments
(cumulative)
3,162
3,735
811
811
10,308
14,581
- Capital increases
(1996, 1997, 2001, 2003)
Value creation since IPO
25
Overview
Hannover
Hannover Re Group
Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Profit growth keeps pace with capital growth
Stable RoE on a very attractive level
Return on Equity: yearly
Return on Equity: average
7,810
+16.2%
6,720
4,738
5,500
15.4%
12.8%
12.1%
2011
5,960
15.0%
11.5%
2012
14.7%
11.3%
2013
Actual
14.7%
11.2%
10.7%
2014
14.5%
12.0%
13.2%
12.5%
10.2%
2015
5-year Ø
2011 – 2015
Minimum target*
Average shareholders' equity
* After tax; target: 900 bps above 5-year rolling average of 10-year German government-bond rate ("risk free")
26
15.1%
10-year Ø
2006 – 2015
15-year Ø
2001 – 2015
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We are somewhat different

Central underwriting with local talent is key to our success
• Secures consistent underwriting decisions
Central U/W

Our
Effective cycle management and focus on profitability
• Selective growth: increase market share in “hard” markets only
• No pressure to grow due to low administrative expense ratio
• Above-average profitability due to stringent underwriting approach with
Cycle
mgmt.
strategic
focus on bottom line
contribution

from
P&C
Reserving
Conservative reserve policy led to build-up of reserve
redundancies over the last years
• Further strengthening of the confidence level of our P&C reserves may be
limited due to IFRS accounting constraints
 Positive effect on C/R
Distribution

Distribution channels
• Flexible cost base due to relatively higher share of business written via
brokers (~2/3)
We are a preferred business partner
27
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Strategy contribution of the P&C business group
Be among world's most profitable R/I & steer volatility in line with our profit targets
customers

Tailor-made solutions
• Comprehensive range of products which
can be tailored to our customers’ needs

Solution driven
• Constant monitoring of markets to identify
trends and classes of business that show
specific potential for the future

Flexible organisation
• Utilisation of all distribution channels,
i.e. direct as well as via intermediaries

Fair and available
• Short lines of communication towards
customers enabling speedy delivery of
solutions
* xRoCA= eXcess Return on Capital Allocated
28
Our profit contribution

xRoCA*
≥ 2%

EBIT margin
≥ 10%

Combined ratio
≤ 96%
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Our Property & Casualty reinsurance business divisions
Target
markets
North America*
GWP split
2015
Continental Europe*
Specialty
lines
worldwide
Marine
Aviation
Target
markets
31%
Global
R/I
38%
Credit, surety and political risks
UK, Ireland, London market
and direct
Facultative R/I
Global
R/I
Worldwide Treaty R/I*
Cat XL
Structured R/I and ILS
* All lines of Property & Casualty reinsurance except those stated separately
29
Specialty lines
worldwide
31%
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Roughly 2/3 of our business is written via brokers
Breakdown of treaties by volume
Breakdown of business written
Direct
business
34%
Nonproportional
35%
Proportional
65%
GWP 2015: EUR 9,338 m.
(2014: EUR 7,903 m.)
30
Broker
business
66%
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Property & Casualty reinsurance: selective growth
GWP split by line of business
in m. EUR
GWP split by regions
9,338
Structured R/I
and ILS
7,717
5%
Worldwide
treaty* R/I
10%
Marine
Aviation
UK, London
market & direct
Credit, surety
and pol. risks
Facultative R/I
Continental
Europe*
7,818
7,903
5%
8%
4%
18%
19%
4%
5%
8%
4%
5%
7%
12%
19%
14%
19%
3%
4%
6%
7%
3%
5%
5%
7%
11%
12%
18%
19%
18%
15%
15%
15%
16%
2012
2013
2014
2015
8%
10%
7%
United
Kingdom
10%
North
America
31%
4% 2%
7%
25%
13%
Germany
12%
13%
12%
20%
16%
15%
Other
Europ.
countries
18%
Asia
17%
North America*
31
Australia
Latin Africa
2%
America 3%
7%
4%
Cat XL
2014
2015
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Strong underlying premium growth accelerated by f/x effects
EBIT up by 12.6% and EBIT margin well above target
in m. EUR
CAGR:
8.1%
7,717
7,818
EBIT/EBIT margin
15.9 %
9,338
in m. EUR
15.5 %
17.0 %
1,341
10.1 %
7,903
16.6 %
1,191
6,826
1,091
1,061
2012
2013
599
2011
2012
2013
2014
2015
2011
EBIT
32
EBIT margin
2014
2015
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Effective cycle management at work
US casualty total inforce premium development
1,029
in m. USD
1,047
947
852
728
726
631
584
552
559
580
584
634
627
670
436
Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16
Inforce premium as at 1 January ≠ U/Y perspective
33
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Ensuring the quality of our portfolio
Our quotation process in Property & Casualty reinsurance
Step 1:
Step 2:
Step 3:
Calculation of the loss
expectancy
Cost estimation
Calculation of the cost of
capital


Commissions


Broker fees

Internal administration
Level of capital allocation
determined by volatility of
the business covered
and contribution to
diversification

Expected return on
equity

Capital structure
Historical loss and
exposure analysis

Future inflation

Changes in the quality
of underlying risks


34
Changes in the
quantity of underlying
risks
Discounting of future
cash flows
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
At an MtCR of ~96% we earn 900 bps above risk free
NPE
+
Net premium
earned
+
Economic revaluation - Capital margin
Discount effect on
P&C net loss reserves
(% of NPE)
-
Capital margin
above risk free
(pre-tax)
=
MtCR
=
Maximum
tolerable
Combined Ratio
2016:
100%
+
3.4%
-
7.4%
=
96.0%
2015:
100%
+
3.8%
-
7.6%
=
96.3%
2014:
100%
+
3.0%
-
7.1%
=
95.9%
2013:
100%
+
3.6%
-
7.5%
=
96.1%
As at March 2016
35
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
MtCR varies substantially by line of business
2016
Net premium earned (100%)
+
North America*
Continental Europe*
Economic revaluation - Capital margin
6.9%
1.0%
= MtCR
10.1%
96.9%
7.1%
93.8%
9.7%
93.3%
Marine
2.9%
Aviation
4.5%
1.9%
7.0%
94.9%
UK, Ireland, London market and direct
4.5%
6.9%
97.6%
Facultative R/I
3.0%
5.9%
97.2%
Worldwide Treaty R/I*
2.8%
6.7%
96.1%
Cat XL
2.7%
23.8%
79.0%
1.9%
98.9%
Total Property & Casualty R/I
0.8%
3.4%
As at March 2016
36
5.1%
7.4%
99.4%
96.0%
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Diversified portfolio outperforms the MtCR
EBIT margin GWP growth
2015: Combined Ratio vs. MtCR
North America*
99.6%
17.8%
+23.1%
Continental Europe*
98.4%
14.6%
+1.8%
Marine
60.0%
50.8%
+5.9%
Aviation
93.6%
21.3%
+3.7%
98.9%
10.7%
+14.0%
UK, Ireland, London market
and direct
86.6%
37.8%
+17.6%
Facultative R/I
94.1%
12.8%
+17.0%
Worldwide Treaty* R/I
95.7%
9.7%
+22.3%
Cat XL
50.2%
69.5%
+20.9%
98.4%
6.1%
+42.4%
94.4%
16.6%
+18.2%
Target
markets
Specialty
lines
worldwide
Global
R/I
Total
0%
Combined Ratio
40%
MtCR = Maximum tolerable Combined Ratio
37
20%
60%
80%
100%
120%
140%
160%
Overview
Hannover Re Group
Property
Property & Casualty
CasualtyR/I
R/I
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Further increasing reserve redundancies* in 2015
7-year average impact on net loss ratio: 2.9%
Year
Redundancy
in m. EUR
Increase redundancy
in m. EUR
Effect on loss ratio
P&C net premium earned
in m. EUR
2009
867
276
5.3%
5,230
2010
956
89
1.6%
5,394
2011
1,117
162
2.7%
5,961
2012
1,308
190
2.8%
6,854
2013
1,517
209
3.1%
6,866
2014
1,546
29
0.4%
7,011
2015
1,887
341
4.2%
8,100
2009 - 2015
total
2009 - 2015
average
1,297
185
45,416
2.9%
6,488
* Redundancy of loss and loss adjustment expense reserve for P&C insurance business against held IFRS reserves, before tax and minority participations.
Willis Towers Watson reviewed these estimates - more details shown in slide V (appendix)
No change in reserving policy in 2015
38
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
We are somewhat different

• Rapid decision-making processes
• In-depth knowledge of local markets
Responsive

We are a highly flexible business partner
• Tailor-made services and solutions
• Ability to anticipate market and client demands
Flexible
Our
We are committed to responsiveness and time to market
strategic
contribution
from
L&H

• 900 experts in 24 offices on all continents
• Highly empowered staff
Efficient
Undogmatic
We foster an efficient organisational set-up

We have an undogmatic approach
• Entrepreneurial spirit
• Appetite to innovate industry solutions
We offer small company flexibility with a large company balance sheet
39
Appendix
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Strategy contribution of the L&H business group
We have ambitious profit and growth targets
customers

Financial solutions
• Tailored reinsurance structures for efficient
capital or liquidity management

Our profit contribution

VNB1)

EBIT margins
Risk solutions
• Financial solutions/Longevity
≥ 2%
• Competitive terms, capacity and reinsurance
• Mortality/Morbidity
≥ 6%
xRoCA2)
≥ 3%
solutions for all types of technical risks

Reinsurance services
• Improvement of sales and underwriting
processes
1) VNB target from 2016 onwards (until 2015 ≥ EUR 180 m.)
2) xRoCA= eXcess Return on Capital Allocated
40
≥ EUR 220 m.

Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We expand our presence by a strong focus
Our current set of solutions

Traditional life & health reinsurance

Financing

Longevity

Regulatory & accounting optimisation
3
2
4
5
1
Reinsurance universe
41
Positive economic value expected
Our focus
1
High growth markets
2
Companies in transition
3
Alternative distribution channels
4
Underserved consumers
5
Hard-to-quantify risks
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We are a decentralised, solution-oriented organisation ...
... with client-oriented offices
Madrid
Dublin
London
Paris
Hannover
Milan
Stockholm
Manama
Toronto
Seoul
Charlotte
Denver
New York
Orlando
Tokyo
Taipei
Hong Kong
Shanghai
Hamilton
Mumbai
Mexico City
Johannesburg
Automated
U/W systems
R&D
technology
Financial
solutions
Risk
assessment
Expert networks
42
Sydney
Health (re-)
insurance
Kuala Lumpur
Biometric
research
Longevity
solutions
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We have well defined reporting categories
Financial solutions
Profitability is less likely to be affected by the
underlying biometric risks
Transactions which include components to provide
alternative means of accessing capital
Risk solutions
Profitability depends largely on the underlying
biometric risks
Mortality
The risk of paying more death benefits than expected
Morbidity
The risk of experiencing a higher claims burden from
traditional health, critical illness, long-term care, and
disability covers
Longevity
The risk of paying annuities and pensions longer than
expected
43
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Life & Health reinsurance: a well diversified portfolio
GWP split by reporting categories
in m. EUR
GWP split by regions
7,731
18%
Morbidity
6,459
6,058
6,145
13%
14%
18%
Mortality
Africa
Latin Germany
3%
3%
America
4%
Other
Europ.
4% 3%
countries
4%
10%
46%
Australia
11%
46%
30%
11%
46%
47%
North
America
28%
12%
Longevity
14%
15%
Financial
solutions
44
15%
16%
22%
19%
25%
25%
20%
17%
2012
2013
2014
2015
United
Kingdom
24%
Asia
17%
2014
2015
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
We have a successful track record
in m. EUR
EBIT/EBIT margin
in m. EUR
7,731
CAGR:
8.7%
6,459
6,058
6.2%
6,145
5.1%
4.9%
4.5%
405
5,270
2.8%
279
264
218
151
2011
2012
2013
2014
2015
2011
EBIT
45
2012
2013
EBIT margin
2014
2015
Overview
Hannover Re Group
Life
Life & Health
Health R/I
R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Striking increase in Value of New Business
Value of New Business development1)
in m. EUR
Target ≥ EUR 180 m.
581
543
448
314
309
2012
2013
241
2011
1) Based on the MCEV principles of the CFO forum
2) Change of cost of capital from 4.5.% to 6.0% (consistent with Solvceny II)
46
2014
2015
2015
2)
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Strong cash flow driven by premium growth
AuM +8.6%, despite decreasing valuation reserves and higher dividend payment
Operating cash flow
in m. EUR
Assets under own management (AuM) in m. EUR
39,347
36,228
2,637
2,523
493
523
2,605
2,225
550
799
705
805 *
608
Q2
Q3
159
363
689
415
296
2013
2014
2015
2011
Q4
* Excluding approx. EUR 500 m. from financial solutions treaties, with an expected cash outflow in 2016
47
2013
718
737
Q1
2012
952
612
2012
28,341
554
822
2011
31,875
1,931
649
473
31,874
2014
2015
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Very pleasing net investment income
Increase in total investments despite less valuation reserves and dividend payment
Total investments
in m. EUR
52,146
46,625
46,219
41,683
15,918
14,751
Investment income
53,337
13,990
14,343
13,342
355
339
28,341
2011
31,874
31,875
2013
Funds withheld and contract deposits
Assets under own management
48
2014
1,412
1,472
357
376
1,054
1,096
2013
2014
395
39,347
1,300
1,046
2012
1,665
1,656
1,384
36,228
in m. EUR
2015
2011
2012
Income and expenses on funds withheld and
contract deposits
Net income from assets under own management
1,270
2015
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Ordinary income supported by asset classes with higher risk
Diverging contribution to investment income from different asset classes
Ordinary income split
EUR 855 m.
Short-term
Others investments
1%
& cash
Real estate1)
1% Governments
14%
11%
Private
Equity
6%
Semigovernments
15%
Asset allocation
Investment category
Fixed-income securities
27 %
- Semi-governments
18 %
- Corporates
32 %
Investment grade
- Pfandbriefe, Covered Bonds, ABS
Equities
Pfandbriefe,
Covered
Bonds, ABS
11%
Corporates
38%
Economic view based on market values as at 30 September 2016
1) Before real estate-specific costs
2) Of which Pfandbriefe and Covered Bonds = 77.2%
49
86 %
- Governments
Non-investment grade
Listed Equity
2%
30 Sep 16
28 %
4%
2)
9%
4%
- Listed Equity
2%
- Private Equity
2%
Real estate/real estate funds
4%
Others
1%
Short-term investments & cash
5%
Total market values in bn. EUR
41.2
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Largely unchanged asset allocation throughout third quarter
Moderate increase in diversified listed equities
Asset allocation 1)
Investment category
2012
2013
2014
2015
92%
90%
90%
87%
86%
- Governments
19%
19%
21%
26%
27%
- Semi-governments
23%
20%
19%
17%
18%
- Corporates
33%
36%
36%
34%
32%
30%
33%
33%
30%
28%
3%
3%
3%
4%
4%
17%
15%
14%
10%
9%
2%
2%
2%
3%
4%
<1%
<1%
<1 %
1%
2%
2%
2%
2%
2%
2%
Real estate/real estate funds
2%
4%
4%
4%
4%
Others3)
1%
1%
1%
1%
1%
Short-term investments & cash
3%
4%
4%
5%
5%
Total market values in bn. EUR
32.5
32.2
36.8
39.8
41.2
Investment grade
Non-investment grade3)
- Pfandbriefe, Covered Bonds, ABS
Equities
- Listed Equity
- Private Equity
30.09.2016
1) Economic view based on market values without outstanding commitments for Private Equity and Alternative Real Estate as well as fixed-income investments
of EUR 983.2 m. (EUR 837.1 m.) as at 30 September 2016
2) Of which Pfandbriefe and Covered Bonds = 77.2%
3) Reallocation of High Yield Funds from “Others” to “Corporates – Non-investment grade”
50
2)
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Fixed-income book well balanced
Geographical allocation mainly in accordance with our business diversification
Governments
Semigovernments
Corporates
Pfandbriefe,
Covered bonds,
ABS
67.2%
Short-term
investments,
cash
-
Total
AAA
76.1%
65.2%
1.2%
AA
11.6%
28.2%
13.6%
15.1%
-
16.1%
A
6.6%
2.5%
37.3%
5.3%
-
16.8%
BBB
4.4%
1.2%
40.0%
8.7%
-
17.2%
<BBB
1.3%
2.9%
8.0%
3.7%
-
4.3%
Total
100.0%
100.0%
100.0%
100.0%
-
100.0%
Germany
9.4%
47.1%
4.2%
26.9%
44.9%
18.6%
UK
5.5%
3.0%
8.2%
9.7%
4.1%
6.3%
France
2.4%
2.3%
7.1%
5.9%
1.1%
4.3%
GIIPS
1.3%
1.0%
5.0%
4.7%
0.0%
2.8%
Rest of Europe
5.1%
17.3%
16.4%
25.1%
3.5%
13.2%
60.6%
5.1%
35.8%
4.3%
14.9%
33.2%
Australia
2.8%
8.4%
7.1%
11.9%
6.5%
6.5%
Asia
7.5%
4.4%
5.2%
0.0%
16.1%
5.8%
Rest of World
5.4%
11.4%
11.2%
11.5%
8.9%
9.3%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
11,165
7,048
12,544
3,624
2,044
36,425
USA
Total
Total b/s values in m. EUR
IFRS figures as at 30 September 2016
51
45.6%
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Currency allocation matches liability profile of balance sheet
Active asset liability management ensures durational match
Currency split of investments
AUD
5.3%
CAD
2.9%
Others
6.5%
5.3
EUR
30.5%
2.2
4.0
GBP
7.4%
7.2
Modified
duration of
portfolio
5.5
4.5
USD
47.4%
Modified duration as at 30 September 2016: 4.8
52

Modified duration of fixedincome mainly congruent with
liabilities

GBP’s higher modified duration
predominantly due to life
business
Modified duration
2015
4.4
2014
4.6
2013
4.4
2012
4.5
2011
4.2
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Active management of credit risk
High level of diversification; Portion of banks stays stable below market average
Corporate allocation
in m. EUR
13,245
11,453
27%
10,584
13,489
13,270
24%
25%
26%
76%
Non-Banks
2013
73%
GBP
2014
2015
30.09.2016
Banks
EUR 3,237 m.
4% <BBB
1 % Others
17% Tier II 13% RoW
24% BBB
24% Asia/
Australia
23% EUR
by currency
* Economic view based on market value as at 30 September 2016
53
9%
75%
73%
2012
16% Others
51% USD
27%
74%
Total bank exposure*
51% A
20% US
83% Senior
21% AA
by rating
by seniority
Rest of
18% Europe
6% GIIPS
10% FR
UK
8% DE
1%
by country
Overview
Hannover Re Group
Life & Health R/I
Investment
Investment mgmt.
mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Stress tests on assets under own management
Unchanged focus on spreads while relevance of equities rises
Portfolio
Scenario
Change in market value
in m. EUR
Change in OCI before tax
in m. EUR
-10%
-156
-156
-20%
-312
-312
+50 bps
-855
-767
+100 bps
-1,667
-1,495
+50%
-752
-722
Equity (listed and private equity)
Credit spreads
As at 30 September 2016
54
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk
Risk mgmt.
mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Several levels of protection provide more NatCat capacity ...
... and thus create additional earnings at a defined risk appetite
Agg. XL
~ EUR 120 m.
Div. cat swaps
max. ~ EUR 93 m.
~ EUR 2.7 bn.
Whole Account
~ EUR 300 m.
K-Cession securitisation
~ EUR 477 m. + expected premium
Group EBIT
EUR 1,755 m.
Policyholders' surplus
(shareholders' equity, non-controlling interest, hybrid capital)
2015: EUR 10,267 m.
As at May 2016
55
Appendix
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk
Risk mgmt.
mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Equity Substitutes
We pioneered securitisations (transfer of risks into capital markets)


In 1994 Hannover Re pioneered the
first securitisation of natural catastrophe
risks (Kover) followed by further
transactions (K2 to K6)
Expired transactions
In 1998 Hannover Re started with the
first-ever transfer of acquisition costs from
life reinsurance business to the capital
market, referred to as "L" deals
(L1 to L7)
On-going transactions
Extreme mortality cover (Q4/14)
K-Cession (Q1/16)
1) Transfer of natural perils (P&C)
3) Portfolio-linked securitisation (P&C)
5) Credit-linked floating rate note
56
in m.
Kover (Q1/94)
USD 851)
K2 (Q4/96)
USD 1502)
L1 (Q1/98)
DEM 100
L2 (Q2/99)
DEM 250
L3 (Q4/99)
EUR 50
L4 (Q4/00)
EUR 200
K3 (Q2/02)
USD 2303)
L5 (Q4/02)
EUR 300
C1 (Q1/05)
USD 2253)
L6 (Q1/06)
EUR 100
K5 (Q1/06)
USD 5403)
~ USD 1776)
Eurus I (Q3/06)
USD 1503)
USD 5173)
Kepler (Q1/07)
USD 2004)
Merlin (Q1/07)
EUR 955)
L7 (Q1/09)
EUR 100
K6 (Q1/09)
USD 3353)
Eurus II (Q3/09)
EUR 1501)
Eurus III (Q3/12)
EUR 1001)
in m.
2) Portfolio-linked swap (P&C)
4) Aggregate XL cover (P&C)
6) Indexed-linked swap (L&H)
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk
Risk mgmt.
mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
The risk is manageable
Stress tests, after retrocessions for natural catastrophes
Effect on forecast net income after tax in m. EUR
Windstorm Europe
Windstorm US
Windstorm Japan
Earthquake Japan
Earthquake California
Earthquake Australia
in m. EUR
2014
2015
100-year loss
(251.0)
(123.5)
250-year loss
(440.0)
(281.2)
100-year loss
(541.7)
(733.7)
250-year loss
(778.1)
(1,031.7)
100-year loss
(172.2)
(153.6)
250-year loss
(250.1)
(199.4)
100-year loss
(254.3)
(200.6)
250-year loss
(520.8)
(477.8)
100-year loss
(303.5)
(349.6)
250-year loss
(503.1)
(746.1)
100-year loss
(172.7)
(136.8)
250-year loss
(449.7)
(378.8)
Limit 2015
Threshold 2015
Actual utilisation
(July 2015)
1,778
1,600
1,481
All natural catastrophe risks*
200-year aggregate annual loss
* Loss relative to the underwriting result
57
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
Our capital structure consists not only of equity
Use of hybrids, securitisations etc. lowers cost of capital and levers RoE

Equity capital is by far the most expensive
Therefore, we make optimal use of equity substitutes, e.g. hybrid capital
Type
Nominal amount
Issue date
First call date
Maturity
Coupon rate
Undated subordinated bond
Format: PerpNC10,8
ISIN:
XS1109836038
EUR 500 m.
2014-09-15
2025-06-26
Perpetual
Until first call date: 3.375% p.a. and thereafter
3.25% p.a. above 3 months EURIBOR
Dated subordinated bond
Format: 30,6NC10,6
ISIN:
XS0856556807
EUR 500 m.
2012-11-20
2023-06-30
2043-06-30
Until first call date: 5.00% p.a. and thereafter
Dated subordinated bond
Format: 30NC10
ISIN: XS0541620901
EUR 500 m.
2010-09-14
2020-09-14
2040-09-14
First 10 years: 5.75% p.a. and thereafter

Conventional reinsurance/retrocession on an opportunistic basis
(i.e. use of other reinsurers' capital)

Securitisations, capital market transactions
Competitive advantage through low cost of capital (WACC)
58
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Financial strength ratings
Group
S&P
A.M. Best
General Reinsurance Corp.
AA+
A++
Hannover Re
AA-
A+
Munich Re
AA-
A+
Swiss Re
AA-
A+
SCOR
AA-
A*
Everest Re
A+
A+
Transatlantic Re
A+
A+
Lloyd's
A+
A
XL Bermuda Ltd.
A+*
A
PartnerRe
A+
A
As at 2 January 2017
* Positive outlook
59
Appendix
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
An above-average rating has numerous benefits ...
... although we might not (yet) get paid for it
We have a better showing of business than the average player


Access to all lines of business
We enjoy a highly diversified, high quality book of business
We are on virtually all broker lists, with cedents often demanding specific R/Is
We get very high allocations when we quote for business

>90% vs. some 50% for a Bermuda start-up
We create lower capital charges for our cedents


"AA" range S&P capital charge on reinsurance recoverables = 0.8% ("A" = 1.4%, BBB = 3.1%)
As an above-average rated R/I, we "minimise" our cedents' cost of capital
Our cost of financing in the capital markets is lower


60
Hybrid bonds trade at tighter spreads
Better conditions for LoCs and credit lines
Outlook
Appendix
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
Solvency II: Internal capital model approved by BaFin
Solvency II
Pillar I
Pillar II
Pillar III
Quantitative requirements
 Capital requirements
(SCR/MCR*)
 Own funds (solvency balance
sheet)
 Standard model and internal
model
Qualitative requirements
 Internal controls, risk
management and key functions
 Internal risk assessment
 Supervisory review procedure
Disclosure requirements
 to the regulator and the public
 with the goal of market
transparency and market
discipline
Hannover Re
Hannover Re has received
approval for its partial internal
capital model.
Internal and external risk
quantification is therefore largely
consistent.
Hannover Re has long had in
place an internal control system,
the necessary key functions and
extensive risk management.
Additional requirements arising
out of Solvency II have been
implemented progressively in
recent years.
* SCR = Solvency Capital Requirement; MCR = Minimum Capital Requirement
61
We support our clients in their
preparations for Solvency II
through the flexible design of our
products and by sharing
experiences.
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
Hannover Re Group maintains comfortable capital position
Capital adequacy above target with substantial excess capital
in m. EUR
Internal Metrics
Available Economic Capital / Own Funds
Confidence Level
Solvency II
12,609
11,983
99.97%
99.5%
99.5%
Required Capital / Solvency Capital Requirements
9,773
5,166
5,433
Excess Capital
2,836
7,443
6,549
Capital Adequacy Ratio
129%
244%
221%
Minimum Target Ratio (Limit)
100%
200%
180%
Minimum Target Ratio (Threshold)
110%
n/a
200%
As at 31 December 2015
62
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
Hannover Re Group is well capitalised under Solvency II
From economic view to regulatory view
Available
Capital
in m. EUR
Internal Model at
VaR1) 99.97%
12,609
Required
Capital
9,773
CAR

Economic view: internal
target confidence level at
99.97%, full internal model,
full transferability of capital

Regulatory view: partial
internal model with standard
formula for operational risk,
confidence level at 99.5%,
transferability restrictions on
minority interests
129%
-4,607
Internal Model at VaR 99.5%
Haircut for Minority Interests2)
12,609
244%
-626
11,983
Add-On, Standard Formula OpRisk
Regulatory View at VaR 99.5%
5,166
5,166
232%
+267
11,983
5,433
221%
1) Value at Risk
2) Non-available minority interests mostly consist of non-controlling interests in E+S Rückversicherung AG
63
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
High quality capital basis
Own funds largely constituted by Tier 1 capital supplemented with hybrid capital
Reconciliation (IFRS Shareholders’ Equity/Solvency II Own Funds)
3,894
in m. EUR
1,583
612
626
532
10,383
1,627
11,983
1,090
511
9%
4%
8,778
Unutilized Tier 2
capacity
87%
Tier 2
capital
Tier 1
hybrid capital
Tier 1
unrestricted capital
Shareholders' Adjustments Adjustments Adjustments Foreseeable
equity incl.
for assets
for technical
due to tax
dividends 2)
minorities
under own
provisions1) effects and
management
others
Minority
haircut
Tier 1
Hybrid capital
unrestricted
capital
Basic own
funds
1) Adjustments for technical provisions incl. risk margin
2) Foreseeable dividends and distributions refer to Hannover Rück SE dividend as well as dividends to minorities within Hannover Re Group
64
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
Capital efficiency supported by high diversification
Capital adequacy ratio: 244%
Risk capital for the 99.5% VaR (according to economic capital model)
Property & Casualty
in m. EUR
3,442
Life & Health
2,132
Market
3,901
Counterparty default
337
Operational
HR Group required capital before tax
Deferred taxes
435
6,867
3,378
1,702
10,246
33% diversification
Effective capital requirement
HR Group required capital after tax
HR Group available economic capital
65
5,166
12,609
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital
Capital mgmt.
mgmt. Q1-3/2016
Outlook
Appendix
Hannover Re is well diversified within each risk category...
..and has a well balanced risk profile
Risk capital for the 99.5% VaR (according to economic capital model)
Underwriting
risk property
and casualty
Underwriting
risk life and
health
Market risk
Operational
risk
66
2,164
Premium (incl. catastrophe)
Reserve
Underwriting risk property and casualty
3,442
1,069
25%
2,346
4,530
1,639
Mortality (incl. catastrophe)
Longevity
Morbidity and disability
Lapse
Underwriting risk life and health
1,291
387
2,132
Credit and spread
Interest rate
Foreign exchange
Equity
Real estate
Market risk
1,836
47%
651
3,950
2,786
806
918
3,901
according to Standard formula
using Internal Model
Capital requirement
Diversification
in m. EUR
2,132
35%
1,057
464
5,960
642
435
0
2,000
4,000
6,000
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Net income increases to EUR 790 m.
Good basis to achieve full-year targets
Group


Gross written premium:
Net premium earned:

EBIT:

Group net income:

RoE:

Book value per share:

Shareholders’ equity:
EUR 12,454 m. (-3.8%)
EUR 10,767 m. (-0.6%)
EUR 1,189 m.

NPE f/x-adj. growth of +1.7%

EBIT and net income benefitting from improved
P&C underwriting result and increased earnings
contribution from L&H
RoE remains well above our minimum target
Shareholders’ equity up by 8.8%, despite dividend
payment in Q2/2016, driven by net income and
increase in valuation reserves
12.5%

EUR 72.81

EUR 8,781 m.
Life & Health R/I
EBIT:
EBIT:
EUR 893 m.
Improved C/R (95.0%) fuelled by
strong underwriting result
 Net major losses of EUR 393 m.
(6.6% of NPE) well below expected
level, driven by benign Q3/2016
 Premium development in line with
selective underwriting approach
67
GWP in line with expectations (f/x adjusted -1.7%)
EUR 790 m.


Investments
EUR 290 m.

EBIT increased significantly by
+17.9%

F/x-adj. GWP -2.0%; decreasing
premium due to discontinuation of
large-volume treaties in Australia
and China, partly offset by attractive
growth in UK Longevity
NII:
RoI from AuM:

EUR 1,146 m.
3.0%
RoI slightly above full-year target
(2.9%)
 Ordinary investment income lower
mainly due to positive one-off effect
in L&H in previous year
 AuM increased by 3.4%
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Favourable earnings contribution from both business groups
Strong profit in Q3/2016
Group figures in m. EUR
Q3/2015
Q3/2016
4,359
4,170
12,946
12,454
Net premium earned
3,811
3,600
10,830
10,767
(33)
47
(73)
44
63
121
220
294
426
402
1,225
1,146
330
327
932
897
95
74
293
250
8
(5)
38
(2)
Operating profit/loss (EBIT)
401
444
1,190
1,189
Interest on hybrid capital
(18)
(18)
(66)
(54)
Net income before taxes
383
426
1,124
1,135
(114)
(112)
(298)
(307)
269
314
826
828
15
10
40
38
254
304
786
790
Retention
87.3%
89.4%
87.9%
89.6%
EBIT margin (EBIT/Net premium earned)
10.5%
12.3%
11.0%
11.0%
Tax ratio
29.7%
26.3%
26.5%
27.0%
2.11
2.52
6.52
6.55
Net underwriting result
- Incl. funds withheld
Net investment income
- From assets under own mgmt.
- From funds withheld
Other income and expenses
Taxes
Net income
- Non-controlling interests
Group net income
Earnings per share (in EUR)
68
Q1-3/2015 Q1-3/2016
YTD

GWP f/x-adjusted growth of -1.7%

NPE f/x-adjusted growth of +1.7%

Satisfactory EBIT margin of 11.0%

Decrease in outstanding hybrid leads to lower
leverage and savings in interest

Tax ratio within normal range
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Underwriting result increased by 9.6%
Premium development in line with selective underwriting approach
Property & Casualty R/I in m. EUR
Q3/2015
Q3/2016
2,347
2,493
7,319
7,121
Net premium earned
2,071
2,087
5,965
5,925
87
116
268
294
95.8%
94.4%
95.5%
95.0%
242
219
657
624
incl. funds withheld
Combined ratio
incl. interest on funds withheld
Net investment income from assets
under own management
Q1-3/2015 Q1-3/2016
12
(25)
353
332
936
893
30.0%
25.8%
26.4%
27.4%
Group net income
233
237
651
613
1.93
1.97
5.40
5.09
69
GWP f/x adjusted -1.5%; growth mainly from
US and structured R/I, reduced volume from
China motor business and specialty lines
 NPE f/x adjusted +0.9%

(4)
Tax ratio


25
YTD
Major losses of EUR 393 m. well below budget
of EUR 621 m. for Q1-3/2016
Positive reserve run-off as expected, no
extraordinary effects in Q3/2016

Satisfactory ordinary investment income

Other income and expenses unremarkable,
Q1-3/2015 benefitted from positive f/x effects

EBIT margin of 15.1% (Q1-3/2015: 15.7%)
well above 10%-target
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Major losses well below budget for Q1-3/2016
Remaining large loss budget (EUR 432 m.) provides comfortable cushion for Q4/16
Natural and man-made catastrophe losses1)
in m. EUR
1,730
981
863
672
410 285
2007
724
478
578
714
559
573
538
426
458
393
291 240
121 107
2006
662
662
2008
2009
2010
2011
2012
2013
2014
2015
Q1-3/2016
Natural and man-made catastrophe losses in % of Property & Casualty premium 2)
2%
8%
2%
13%
6%
5%
11%
14%
5%
25%
12%
16%
9%
9%
7%
8%
8%
7%
8%
6%
7%
7%
560
625
670
690
825
Expected large losses (net) in m. EUR
377
Gross
360
Net
428
450
500
530
Expected large losses (net)
1) Up to 2011 claims over EUR 5 m. gross, from 2012 onwards claims over EUR 10 m. gross
2) 2006 adjusted to new segmentation
70
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Benign large loss experience in Q1-3/2016 ...
... driven by very moderate loss situation in Q3/2016
Catastrophe losses* in m. EUR
Date
Gross
Earthquake, Taiwan
6 Feb
21.2
19.9
Earthquake, Japan
14 Apr
25.9
24.5
Earthquake, Ecuador
16 - 17 Apr
56.4
55.5
Wildfires, Canada
30 Apr - 5 May
186.2
125.3
Storm "Elvira", Germany, France
27 - 28 May
19.8
12.7
Storm / Flood, China
1 Jun - 31 Jul
13.0
13.0
Storm / Hail, Netherlands, Germany
22 - 23 Jun
15.7
7.7
338.1
258.6
3 Marine claims
96.7
50.2
3 Property claims
80.9
62.1
1 Credit claim
22.3
22.3
538.1
393.2
7 Natural catastrophes
14 Major losses
* Natural catastrophes and other major losses in excess of EUR 10 m. gross
71
Net
Appendix
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Significantly increased earnings contribution from L&H
Net income increased by 17.9%
Life and health R/I in m. EUR
Q3/2015
Q3/2016
2,012
1,677
5,627
5,333
Net premium earned
1,739
1,513
4,864
4,841
(24)
5
(48)
1
87
105
266
263
(17)
0
28
26
46
111
246
290
incl. funds withheld
Net investment income from assets
under own management
EBIT margin
Tax ratio
Group net income
72
Q1-3/2015 Q1-3/2016
2.7%
7.4%
5.1%
6.0%
28.4%
28.8%
26.9%
26.9%
32
78
178
209
0.27
0.65
1.47
1.73
YTD


GWP f/x-adj. -2.0%, reduced premium due to
discontinued large-volume treaties in Australia &
China partly offset by growth from UK Longevity
NPE f/x-adjusted growth +2.8%

Improved technical result in line with
expectation


Ordinary investment income in line with
expectation (Q1/2015 affected by positive
one-off of EUR 39 m.)
Decreased impact from positive f/x effects

EBIT margins:
• Financial solutions: 19.7%, (target 2.0%)
• Longevity: 2.4% (target 2.0%)
• Mortality and Morbidity: 4.3% (target 6.0%)
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Investment income slightly above expectations
RoI target achieved
RoI
YTD
855
2.8%

124
154
0.5%
(13)
(24)
(61)
-0.2%
(8)
9
(9)
29
0.1%
Investment expenses
(28)
(27)
(80)
(80)
-0.3%
Decrease in ordinary income due
to challenging yield environment
and last year´s one-off effect from
L&H business; decreased
contribution from fixed-income
securities partly compensated by
higher income from Private Equity
and Real Estate
NII from assets under own mgmt.
330
327
932
897
3.0%

95
74
293
250
426
402
1,225
1,146
Realised gains up mainly due to
Private Equity and last year´s oneoff burden from inflation swaps

Increasing impairments driven by
Listed and Private Equities as well
as regular depreciation on real
estate

Valuation reserves with remarkable
increase compared to year-end
levels as yields and credit spreads
once again decrease significantly
Q3/2015
Q3/2016
318
285
921
Realised gains/losses
58
74
Impairments/appreciations &
depreciations
(9)
Change in fair value of financial
instruments (through P&L)
in m. EUR
Ordinary investment income*
NII from funds withheld
Total net investment income
Unrealised gains/losses of investments
On Balance-sheet
thereof Fixed income AFS
Off Balance-sheet
thereof Fixed income HTM, L&R
Total
* Incl. results from associated companies
73
Q1-3/2015 Q1-3/2016
31 Dec 15 30 Sep 16
1,146
2,087
636
1,593
497
557
411
456
1,643
2,644
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Target Matrix 2016
Profit targets largely achieved
Strategic targets
for 2016
Business group
Key figures
Group
Return on investment
≥2.9%
3.0%
≥10.0%
12.5%
≥6.5%
0.5%
≥7.5%
n.a.
4)
-1.5%
5)
95.0%
≥10%
15.1%
≥2%
n.a.
8)
-2.0%
≥ EUR 220 m.
n.a.
EBIT margin6) Financial solutions/Longevity
≥2%
9.4%
EBIT margin6) Mortality/Morbidity
≥6%
4.3%
xRoCA7)
≥3%
n.a.
1)
2)
Return on equity
Earnings per share growth (y-o-y)
Value creation per share
3)
Gross premium growth
3% - 5%
≤96%
Combined ratio
6)
EBIT margin
xRoCA
Life & Health R/I
7)
Gross premium growth
5% - 7%
Value of New Business (VNB)
1) Excl. effects from ModCo derivatives
3) Growth in book value per share + paid dividend
5) Incl. expected net major losses of EUR 825 m.
7) Excess return on allocated economic capital
9) Based on a cost of capital of 6% (until 2014: 4.5%)
74
Q1-3/2016
9)
2) After tax; target: 900 bps above 5-year average return of 10-year German government bonds
4) On average throughout the R/I cycle; at unchanged f/x rates
6) EBIT/net premium earned
8) Organic growth only; annual average growth (5 years), at unchanged f/x rates
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Our strategic business groups at a glance
Q1-3/2016 vs. Q1-3/2015
in m. EUR
Q1-3/2015 Q1-3/2016
Δ
Life & Health R/I
Q1-3/2015 Q1-3/2016
Total
Δ
Q1-3/2015 Q1-3/2016
Δ
7,319
7,121
-2.7%
5,627
5,333
-5.2%
12,946
12,454
-3.8%
Net premium earned
5,965
5,925
-0.7%
4,864
4,841
-0.5%
10,830
10,767
-0.6%
251
276
+9.6%
(325)
(231)
-28.9%
(73)
44
-
268
294
+9.9%
(48)
1
-
220
294
+33.7%
673
642
-4.5%
543
495
-8.9%
1,225
1,146
-6.4%
657
624
-5.0%
266
263
+38.8%
932
897
-3.8%
16
19
+14.4%
277
231
-16.4%
293
250
-14.7%
12
(25)
-
28
26
-5.3%
38
(2)
-
936
893
246
290
+17.9%
1,190
1,189
-0.1%
(0)
0
0
0
(66)
(54)
-18.9%
936
893
-4.6%
246
290
+17.9%
1,124
1,135
+1.0%
(247)
(244)
-1.3%
(66)
(78)
+18.0%
(298)
(307)
+3.0%
689
649
-5.8%
180
212
+17.9%
826
828
+0.3%
38
35
-7.1%
2
3
+48.6%
40
38
-4.0%
651
613
-5.8%
178
209
+17.5%
786
790
+0.5%
Retention
88.8%
88.3%
86.8%
91.5%
87.9%
89.6%
Combined ratio (incl. interest on funds withheld)
95.5%
95.0%
101.0%
100.0%
98.0%
97.3%
EBIT margin (EBIT / Net premium earned)
15.7%
15.1%
5.1%
6.0%
11.0%
11.0%
Tax ratio
26.4%
27.4%
26.9%
26.9%
26.5%
27.0%
5.40
5.09
1.47
1.73
6.52
6.55
Net underwriting result incl. funds withheld
From assets under own management
From funds withheld
Taxes
Net income
Non-controlling interest
Group net income
75
-4.6%
-
-
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Our strategic business groups at a glance
Q3 stand-alone
Q3/2015
Q3/2016
2,347
2,493
Net premium earned
2,071
Δ
Life & Health R/I
-16.6%
4,359
4,170
-4.3%
1,513
-13.0%
3,811
3,600
-5.5%
(113)
(62)
-45.6%
(33)
47
-
+34.2%
(24)
5
63
121
+94.1%
226
-8.6%
176
173
-2.1%
426
402
-5.7%
242
219
-9.2%
87
105
+21.1%
330
327
-1.0%
6
7
+15.2%
89
67
-24.8%
95
74
-22.2%
25
(4)
-114.3%
(17)
0
-
8
(5)
-161.7%
353
332
-5.8%
46
111
+140.6%
401
444
+10.7%
0
(0)
(0)
(0)
-
(18)
(18)
-0.2%
353
332
-5.8%
46
111
+140.6%
383
426
+11.2%
(106)
(86)
-19.1%
(13)
(32)
+144.3%
(114)
(112)
-1.4%
247
246
-0.2%
33
79
+139.2%
269
314
+16.6%
14
9
-35.7%
1
1
-1.6%
15
10
-33.5%
233
237
+2.0%
32
78
+143.5%
254
304
+19.6%
Retention
87.3%
88.5%
87.2%
90.8%
87.3%
89.4%
Combined ratio (incl. interest on funds withheld)
95.8%
94.4%
101.4%
99.6%
98.4%
96.6%
EBIT margin (EBIT / Net premium earned)
17.0%
15.9%
2.7%
7.4%
10.5%
12.3%
Tax ratio
30.0%
25.8%
28.4%
28.8%
29.7%
26.3%
1.93
1.97
0.27
0.65
2.11
2.52
Net underwriting result incl. funds withheld
From assets under own management
From funds withheld
Taxes
Net income
Non-controlling interest
Group net income
76
+6.2%
2,012
1,677
2,087
+0.8%
1,739
80
109
+35.6%
87
116
248
Δ
Q3/2016
Q3/2016
Δ
Q3/2015
in m. EUR
Q3/2015
Total
-
-
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016 Outlook
Outlook
Appendix
Guidance for 2016
Hannover Re Group

Gross written premium1)
stable to modest reduction

Return on investment2) 3)
~2.9%

Group net income2)

Dividend payout ratio4)
at least EUR 950 m.
(If comfortable level of capitalisation remains unchanged, this ratio will increase
through payment of another special dividend)
1) At unchanged f/x rates
2) Subject to no major distortions in capital markets and/or major losses in 2016 not exceeding the large loss budget of EUR 825 m.
3) Excluding effects from ModCo derivatives
4) Related to group net income according to IFRS
77
35% - 40%
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016 Outlook
Outlook
Appendix
Overall profitability still above margin requirements
Property & Casualty R/I: financial year 2016
Lines of business
Target
markets
North America3)
Continental Europe 3)
Marine
Specialty
lines
worldwide
Aviation


+
+/-


+
+/+/+/-
Facultative R/I
Worldwide treaty3) R/I

Cat XL
1) In EUR
2) ++ = well above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)
3) All lines of business except those stated separately
78
Profitability 2)



UK, Ireland, London market and direct
Global
R/I
Volume1)


+/+/-
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016 Outlook
Outlook
Appendix
Increasing normalised earnings expected
Life & Health R/I: financial year 2016
Reporting categories
Financial
solutions
Risk
solutions
Profitability2)
++
Financial solutions
Longevity

+/-
Mortality

+/-
Morbidity
1) In EUR
2) ++ = well above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)
79
Volume1)
+/-
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016 Outlook
Outlook
Appendix
Increasing earnings in the medium term
Short term stable earnings and payment of extraordinary dividends
Property & Casualty reinsurance results
Positioned to outperform


soft market
improving market

Life & Health reinsurance results
EUR 300 – 350 m.
Investments
Increasing profits in the medium term
 Improving underlying profitability masked by
legacy US mortality business in the short term
(2017/2018)
 Favourable trends from positive VNB (20112015: EUR 1.9 bn.) visible as IFRS results from
2019 onwards
Stable absolute NII in low yield environment
Continued low interest rates?
80
High confidence level of reserves supporting
stable earnings despite soft market (C/R ≤96%)
Strong market position and financial strength
enable us to outgrow the market when market
conditions improve
Better conditions for our increased retro coverage

Pressure from low interest rates and declining
return on investments offset by …

… increasing investment volume from further
positive cash flow
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016 Outlook
Outlook
Appendix
Guidance for 2017
Hannover Re Group

Gross written premium1)
stable to modest reduction

Return on investment2) 3)
~2.7%

Group net income2)

Dividend payout ratio4)
more than EUR 950 m.
(If comfortable level of capitalisation remains unchanged, this ratio will increase
through payment of another special dividend)
1) At unchanged f/x rates
2) Subject to no major distortions in capital markets and/or major losses in 2017 not exceeding the large loss budget of EUR 825 m.
3) Excluding effects from ModCo derivatives
4) Related to group net income according to IFRS
81
35% - 40%
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Appendix
Financial calendar
2 February 2017
10 May 2017
19 October 2017
1 January
P&C Treaty
Renewals
Annual
General
Meeting
Investors’ Day
2017
Quarterly
Statement as at
31 March 2017
9 March 2017
10 August 2017
8 November 2017
Annual Results
Press and
Analysts’
Conference
Half-yearly
Financial
Report 2017
Quarterly
Statement as at
30 September
2017
Subject to changes
www.hannover-re.com/288212/calendar
I
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Appendix
Basic information on the Hannover Re share
Basic information
International Securities Identification Number (ISIN)
DE 000 840 221 5
Ticker symbols
- Bloomberg
HNR1
- Thomson Reuters
HNRGn
- ADR
HVRRY
Exchange listings
- Germany
Xetra, Frankfurt, Munich, Stuttgart, Hamburg, Berlin, Düsseldorf,
Hannover (official trading: Xetra, Frankfurt and Hannover)
- USA
American Depositary Receipts
(Level 1 ADR programme; 2 ADR = 1 share)
Market segment
Prime Standard
Index inclusion
MDAX
First listed
30 November 1994
Number of issued shares*
120,597,134
Common shares*
EUR 120,597,134
Share class
No-par-value registered shares
II
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Appendix
List of abbreviations
A
ABS
ADR
AFS
AG
AuM
B
BAT
biz
bn.
bps
b/s
C
CAGR
Cat
C/R
D
E
EBIT
ECM
EPS
ESG
F
G
GIIPS
GWP
H
HR
HTM
I
IFRS
ILS
IPO
ISIN
IVC
J, K
L
L&R
LoC
LPT
M
m.
III
Asset-Backed Securities
American Depositary Receipts
Available-For-Sale
Aktiengesellschaft (public company)
Assets under Management
Block Assumption Transactions
business
billion
basis points
balance sheet
Compound Annual Growth Rate
catastrophe
Combined Ratio
Earnings Before Interest and Taxes
Economic Capital Model
Earnings per share
Environmental, Social, Governance
Greece, Ireland, Italy, Portugal, Spain
Gross Written Premium
Hannover Re
Held-To-Maturity
International Financial Reporting Standards
Insurance-Linked Securities
Initial Public Offering
International Securities Identification Number
Intrinsic Value Creation
Loans & Receivables
Letter of Credit
Loss Portfolio Transfer
million
MCEV
MCR
mgmt.
ModCo
MtCR
N
n.a.
NC
NII
NPE
O
OCI
P
P&L
p.a.
Perp
prop.
Q
R
R/I
RoE
RoI
S
S&P
SCR
SE
T
U
U/Y
U/W
V
V.a.G.
VaR
VNB
W
WACC
X
XL
xRoCA
Y
YTD
y-o-y
Z
Market Consistent Embedded Value
Minimum Capital Requirements
management
Modified Coinsurance
Maximum tolerable Combined Ratio
not available
non-callable
Net Investment Income
Net Premium Earned
Other Comprehensive Income
profit and loss
per annum
perpetual
proportional
Reinsurance
Return on Equity
Return on Investment
Standard & Poor's
Solvency Capital Requirements
Societas Europaea (European Company)
underwriting year
Underwriting
Versicherungsverein auf Gegenseitigkeit (mutual insurance company)
Value at Risk
Value of New Business
Weighted Average Cost of Capital
eXcess of Loss
eXcess Return on Capital Allocated
Year To Date
year-on-year
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Our Investor Relations team
Karl Steinle
General Manager
Julia Hartmann
Senior IR Manager
Axel Bock
IR Manager
Tel: +49 511 5604 - 1500
[email protected]
Tel: +49 511 5604 - 1529
[email protected]
Tel: +49 511 5604 - 1736
[email protected]
Hannover Rück SE
Karl-Wiechert-Allee 50
30625 Hannover
Germany
www.hannover-re.com
IV
Appendix
Appendix
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Appendix
Details on reserve review by Willis Towers Watson
The scope of Willis Towers Watson’s work was to review certain parts of the held loss and loss adjustment expense reserve, net of outwards reinsurance, from Hannover Rück SE’s
consolidated financial statements in accordance with IFRS as at each 31 December from 2009 to 2015, and the implicit redundancy margin, for the non-life business of Hannover Rück
SE. Willis Towers Watson concludes that the reviewed loss and loss adjustment expense reserve, net of reinsurance, less the redundancy margin is reasonable in that it falls within Willis
Towers Watson’s range of reasonable estimates.
•
Life reinsurance and health reinsurance business are excluded from the scope of this review.
•
Willis Towers Watson’s review of non-life reserves as at 31 December 2015 covered 98.2% / 98.1% of the gross and net held non-life reserves of €22.8 billion and € 21.8 billion
respectively. Together with life reserves of gross €3.7 billion and net €3.4 billion, the total balance sheet reserves amount to €26.6 billion gross and €25.2 billion net.
•
The results shown in this presentation are based on a series of assumptions as to the future. It should be recognised that actual future claim experience is likely to deviate, perhaps
materially, from Willis Towers Watson’s estimates. This is because the ultimate liability for claims will be affected by future external events; for example, the likelihood of claimants
bringing suit, the size of judicial awards, changes in standards of liability, and the attitudes of claimants towards the settlement of their claims.
•
The results shown in Willis Towers Watson’s reports are not intended to represent an opinion of market value and should not be interpreted in that manner. The reports do not
purport to encompass all of the many factors that may bear upon a market value.
•
Willis Towers Watson’s analysis was carried out based on data as at evaluation dates for each 31 December from 2009 to 2015. Willis Towers Watson’s analysis may not reflect
development or information that became available after the valuation dates and Willis Towers Watson’s results, opinions and conclusions presented herein may be rendered
inaccurate by developments after the valuation dates.
•
As is typical for reinsurance companies, the claims reporting can be delayed due to late notifications by some cedants. This increases the uncertainty in the estimates.
•
Hannover Rück SE has asbestos, environmental and other health hazard (APH) exposures which are subject to greater uncertainty than other general liability exposures. Willis
Towers Watson’s analysis of the APH exposures assumes that the reporting and handling of APH claims is consistent with industry benchmarks. However, there is wide variation in
estimates based on these benchmarks. Thus, although Hannover Rück SE’s held reserves show some redundancy compared to the indications, the actual losses could prove to be
significantly different to both the held and indicated amounts.
•
Willis Towers Watson has not anticipated any extraordinary changes to the legal, social, inflationary or economic environment, or to the interpretation of policy language, that might
affect the cost, frequency, or future reporting of claims. In addition, Willis Towers Watson’s estimates make no provision for potential future claims arising from causes not
substantially recognised in the historical data (such as new types of mass torts or latent injuries, terrorist acts), except in so far as claims of these types are included incidentally in
the reported claims and are implicitly developed.
•
In accordance with its scope Willis Towers Watson’s estimates are on the basis that all of Hannover Rück SE’s reinsurance protection will be valid and collectable. Further liability
may exist for any reinsurance that proves to be irrecoverable.
•
Willis Towers Watson’s estimates are in Euros based on the exchange rates provided by Hannover Rück SE as at each 31 December evaluation date. However, a substantial
proportion of the liabilities is denominated in foreign currencies. To the extent that the assets backing the reserves are not held in matching currencies, future changes in exchange
rates may lead to significant exchange gains or losses.
•
Willis Towers Watson has not attempted to determine the quality of Hannover Rück SE’s current asset portfolio, nor has Willis Towers Watson reviewed the adequacy of the balance
sheet provisions except as otherwise disclosed herein.


In its review,Willis Towers Watson has relied on audited and unaudited data and financial information supplied by Hannover Rück SE and its subsidiaries, including information provided
orally. Willis Towers Watson relied on the accuracy and completeness of this information without independent verification.
 Except for any agreed responsibilities Willis Towers Watson may have to Hannover Rück SE, Willis Towers Watson does not assume any responsibility and will not accept any liability to
any person for any damages suffered by such person arising out of this commentary or references to Willis Towers Watson in this document.
V
Overview
Hannover Re Group
Life & Health R/I
Investment mgmt.
Risk mgmt.
Capital mgmt.
Q1-3/2016
Outlook
Appendix
Appendix
Disclaimer
This presentation does not address the investment objectives or financial situation of any particular person or
legal entity. Investors should seek independent professional advice and perform their own analysis regarding
the appropriateness of investing in any of our securities.
While Hannover Re has endeavoured to include in this presentation information it believes to be reliable,
complete and up-to-date, the company does not make any representation or warranty, express or implied,
as to the accuracy, completeness or updated status of such information.
Some of the statements in this presentation may be forward-looking statements or statements of future
expectations based on currently available information. Such statements naturally are subject to risks and
uncertainties. Factors such as the development of general economic conditions, future market conditions,
unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the
actual events or results to be materially different from those anticipated by such statements.
This presentation serves information purposes only and does not constitute or form part of an offer
or solicitation to acquire, subscribe to or dispose of, any of the securities of Hannover Re.
© Hannover Rück SE. All rights reserved.
Hannover Re is the registered service mark of Hannover Rück SE.
VI

Hannover Re: the somewhat different reinsurer

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