Performance

The Hannover Re share began 2010 at a price of EUR 32.71. The performance in the first three months of the year was determined largely by the reporting on the treaty renewals as well as the publication of the year-end results for the 2009 financial year. On the back of the company’s favourable development the price of the Hannover Re share climbed to EUR 36.56 by the end of the first quarter. However, heavy loss expenditures – resulting inter alia from the earthquake in Chile and the sinking of the “Deepwater Horizon” drilling rig in the Gulf of Mexico – adversely impacted the share performance in the second quarter. Between June and November the share price then moved in a sideways direction. However, the publication of the figures for the first nine months and the associated raising of the guidance for the full year prompted vigorous price increases – the share reached its highest point of the year on 22 December at EUR 41.38. At the end of the financial year on 31 December 2010 the Hannover Re share was listed at EUR 40.14, an improvement of 22.7% on the previous year-end closing. We thus comfortably outperformed our benchmark, the RBS Global Reinsurance Index, which put on just 14.8%.

In a three-year comparison (see chart) the Hannover Re share including reinvested dividends delivered a performance of +27.2%. It thus clearly surpassed the DAX (–14.3%), MDAX (+2.7%) and the RBS Global Reinsurance Index (+15.9%).

The market capitalisation of the Hannover Re Group totalled EUR 4,840.8 million as at year-end. With a free float market capitalisation of EUR 2,384.6 million our company ranked seventh in the MDAX at the end of December, while our share came in at number 10 in the MDAX according to the criterion “trading volume over the past twelve months” with a volume of EUR 3,227.7 million. According to both criteria the Hannover Re Group thus ranks among the 50 largest listed companies in Germany.

With a book value per share of EUR 37.39 the Hannover Re share showed a price-to-book (P/B) ratio of 1.1 as at year-end 2010; compared to the average MDAX P/B ratio of 1.9 as at year-end the share is thus very moderately valued. A comparison of the price-to-earnings (P/E) ratios reveals a similar picture, although it makes sense here to base the comparison on the expected earnings for 2011 since the results posted by many MDAX companies in 2010 were still heavily impacted by the economic crisis. Based on current guidance for the 2011 financial year, the P/E ratio for Hannover Re at the turn of the year stood at just 7.4 as against 14.9 for the MDAX.

As far as the dividend for the 2010 financial year is concerned, we intend to propose to our shareholders at the Annual General Meeting on 3 May 2011 that an amount of EUR 2.30 (EUR 2.10) per share be distributed. This represents an increase on the previous year. Based on the year-end closing price of EUR 40.14, this produces a dividend yield of 5.7%.