Development of premium income
The gross premium income booked by Hannover Life Re totalled EUR 3.1 billion (EUR 3.1 billion) in the year under review; this corresponds to growth of 1.7% year-on-year. The strength of the euro against our three most important foreign currencies - namely the pound sterling, US dollar and Australian dollar - means that the real increase in the international portfolio is not fully reflected; at constant exchange rates growth would have stood at 7.9%. Net premium earned contracted by 0.4% to EUR 2.8 billion (EUR 2.8 billion) owing to a slight reduction in the level of retained premium.
The United Kingdom reaffirmed its position as the largest market in our portfolio through significant expansion in the area of impaired/enhanced annuities - despite the fact that we scaled back our involvement in risk-oriented covers in the face of the competitive situation.
Excel download (20 KB)Key figures for life and health reinsurance
| Figures in EUR million | 2008 | +/- previous year |
2007 | 2006 | 20051) | 20041) |
|---|---|---|---|---|---|---|
| Gross written premium | 3,134.4 | +1.7% | 3,082.9 | 2,793.6 | 2,425.1 | 2,176.6 |
| Premium deposits | 2,181.2 | +155.3% | 854.5 | 1,166.2 | 308.1 | 311.4 |
| Gross premium incl. premium deposits | 5,315.6 | +35.0% | 3,937.4 | 3,959.8 | 2,733.2 | 2,487.9 |
| Net premium earned | 2,784.9 | -0.4% | 2,795.3 | 2,373.4 | 2,257.6 | 1,956.3 |
| Premium deposits | 2,126.9 | +171.4% | 783.6 | 1,084.4 | 274.5 | 267.2 |
| Net premium incl. premium deposits | 4,911.8 | +37.2% | 3,579.0 | 3,457.8 | 2,532.1 | 2,223.5 |
| Investment income | 245.5 | -16.4% | 293.9 | 313.2 | 275.3 | 221.6 |
| Claims expenses | 1,674.7 | +0.2% | 1,672.2 | 1,495.3 | 1,415.2 | 1,212.6 |
| Change in benefit reserves | 421.3 | +5.9% | 397.9 | 192.8 | 258.0 | 241.2 |
| Commissions | 743.4 | -4.8% | 780.5 | 831.7 | 684.1 | 589.6 |
| Own administrative expenses | 70.1 | +14.5% | 61.2 | 50.0 | 59.3 | 55.9 |
| Other income/expenses | -0.2 | -100.4% | 52.7 | 22.7 | -23.1 | -2.0 |
| Operating result (EBIT) | 120.7 | -47.5% | 229.8 | 139.5 | 93.1 | 76.7 |
| Group net income (loss) | 78.3 | -58.3% | 187.7 | 102.6 | 59.6 | 38.0 |
| Earnings per share in EUR | 0.65 | -58.3% | 1.57 | 0.85 | 0.49 | 0.32 |
| Retention | 89.3% | 90.8% | 85.4% | 92.8% | 90.2% | |
| EBIT margin2) | 4.3% | 8.2% | 5.9% | 4.1% | 3.9% | |
| 1) Figures for 2005 and 2004 before new segmentation | ||||||
| 2) Operating profit (EBIT)/net premium earned | ||||||
The United Kingdom currently accounts for 27.3% (30.1%) of our premium, followed by the United States – where most notably we consolidated our position in the areas of private health insurance covers for senior citizens and block assumption transactions – with 21.6% (20.8%). Germany and Australia ranked third and fourth with shares of 12.2% (14.0%) and 9.6% (11.6%) respectively. Further key markets are Ireland, France, South Africa, Barbados, Italy, Luxembourg and Asia, with the latter market in particular recording above-average growth of almost 18%. Business in Latin America similarly generated strong growth rates.
Our preferred lines of life and annuity – in which the biometric risks of mortality and longevity are of primary relevance from the standpoint of risk considerations – accounted for almost 85% of the total premium income booked by Hannover Life Re in the year under review.
As far as the morbidity risk is concerned, our principal areas of involvement are US senior health medicare supplement products, long-term care covers in Europe and Asia and disability policies in Australia. Individual accident business again accounted for a modest, but stable share of our premium volume at 2.2%.
We do not offer reinsurance protection for long-term financial guarantees in connection with deferred unit-linked annuities.