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DGAP-News: Hannover Rück SE
/ Key word(s): Quarterly / Interim Statement
Corporate news Hannover Re continues profitable premium growth and confirms guidance for 2021
Hannover, 5 August 2021: Hannover Re substantially increased its Group net income in the first half of 2021 and considers itself well on track to achieve the targets set for the current financial year. At the same time, gross premiums saw further double-digit growth. "We achieved a thoroughly satisfactory half-year result that is broadly in line with our expectations and another testament to our robust market position and excellent risk management," said Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re. "As shown by our sustained strong growth, our risk covers are highly valued by our clients in times of crisis and beyond." Group net income: Profitability returns to pre-pandemic level Property and casualty reinsurance: Combined ratio of 96.0% in line with expectation The gross written premium in property and casualty reinsurance showed corresponding vigorous growth of 11.9% to reach EUR 10.3 billion (EUR 9.2 billion). The increase would have amounted to 17.2% adjusted for exchange rate effects. Net premium earned climbed by 14.2% to EUR 7.8 billion (EUR 6.9 billion). Growth would have amounted to 19.2% at constant exchange rates. The net major loss expenditure of EUR 325.9 million (EUR 737.0 million) in the first half-year was appreciably lower than in the previous year and below the budgeted level for the first six months of EUR 476 million. No further reserves were required in property and casualty reinsurance for the Covid-19 pandemic in the first half of the year. In accordance with past practice, the unutilised large loss budget within the year is allocated to the IBNR reserve, thereby creating an additional cushion for large losses in the second half of the year. The largest individual losses were the outbreak of extreme winter weather in the US state of Texas with net expenditure of EUR 136.4 million in the first six months, an industrial loss in Germany costing EUR 34.8 million and a credit loss of EUR 20.7 million. The underwriting result including interest on funds withheld and contract deposits amounted to EUR 316.8 million (EUR -160.7 million) for property and casualty reinsurance. The combined ratio improved sharply to 96.0% (102.3%) and was thus within the expectation of no more than 96%. The operating profit (EBIT) in property and casualty reinsurance surged to EUR 777.9 million (EUR 290.0 million). Net income improved to EUR 592.1 million (EUR 244.7 million). Particularly attractive opportunities for business growth were offered by covers for longevity risks and in the area of financial solutions, where Hannover Re offers its clients individually tailored reinsurance solutions to improve their solvency, liquidity and capital position. On the earnings side, the impacts of the pandemic continued to be a dominant factor in life and health reinsurance, especially in the area of mortality covers. The expenditures incurred by Hannover Re in relation to Covid-19 amounted to EUR 263.4 million in the first half of the year. While the bulk of the pandemic-related losses in the first six months were attributable to the United States, clients in Latin America and South Africa were also affected by Covid-19 claims. It is Hannover Re's expectation that the strains will diminish as vaccination rates increase. As already reported, the expenditures associated with the pandemic were opposed in the first quarter by positive one-time income from a restructuring measure in the book of US mortality business amounting to EUR 129.3 million. The operating result (EBIT) in life and health reinsurance declined by 16.4% to EUR 179.1 million (EUR 214.2 million) owing to the further pandemic-related strains. Net income contracted by 44.4% to EUR 104.8 million (EUR 188.4 million). Income from assets under own management increased by 5.6% to EUR 693.7 million (EUR 656.8 million). The resulting annualised return amounted to 2.7% and was thus ahead of the full-year target of around 2.4%. Total investment income improved on the previous year by 9.2% to EUR 865.8 million (EUR 793.1 million). The capital adequacy ratio under Solvency II, which measures Hannover Re's risk-carrying capacity, amounted to 250% as at the end of June. This figure is comfortably above the limit of 180% and the internal threshold of 200%. "We offer our customers the high-quality reinsurance protection they really need in challenging times like these," Henchoz said. "This has been further underscored by the rating agencies Standard & Poor's and A.M. Best, which again confirmed our financial strength ratings of AA- ("Very Strong") and A+ ("Superior")." Outlook for 2021: Hannover Re confirms all full-year guidance after successful first half-year Hannover Re envisages an unchanged payout ratio for the ordinary dividend in the range of 35% to 45% of its IFRS Group net income. The ordinary dividend will be supplemented by payment of a special dividend subject to a continued comfortable level of capitalisation and Group net income within the bounds of expectations. Achievement of the earnings guidance is dependent on major loss expenditure not significantly exceeding the budgeted level of EUR 1.1 billion and assumes that there are no exceptional distortions on capital markets. Following the end of the second quarter parts of Germany, Belgium, the Netherlands, Switzerland and Austria were devastated by heavy rainfall and flooding. Following an initial analysis of the damage Hannover Re's net expenditure is expected at EUR 200 million to EUR 250 million. For the second half of the year indications are also already emerging of losses from the riots in South Africa. "The catastrophic flood events in Germany and other European regions have once again shown that the climate is changing at a tremendous pace. We shall continue to progressively expand our sustainability measures and thereby play our part in addressing climate change and limiting its impacts," said Henchoz. "Despite all the challenges we are well on track to achieve our ambitious goals in the current financial year. Based on the figures for the first six months, I am optimistic for the development of Hannover Re's business over the remainder of the year." Hannover Re, with gross premium of more than EUR 24 billion, is the third-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with more than 3,000 staff. Established in 1966, the Hannover Re Group today has a network of more than 170 subsidiaries, branches and representative offices worldwide. The Group's German business is written by the subsidiary E+S Rück. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior". Please note the disclaimer: Key figures of the Hannover Re Group (IFRS basis)
Key figures of the Hannover Re Group (IFRS basis)
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05.08.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. |
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| Language: | English |
| Company: | Hannover Rück SE |
| Karl-Wiechert-Allee 50 | |
| 30625 Hannover | |
| Germany | |
| Phone: | +49-(0)511-5604-1500 |
| Fax: | +49-(0)511-5604-1648 |
| Internet: | -re.com |
| ISIN: | DE0008402215 |
| WKN: | 840 221 |
| Indices: | MDAX |
| Listed: | Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange |
| EQS News ID: | 1224119 |
| End of News | DGAP News Service |
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1224119 05.08.2021
