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Life & Health reinsurance
Life and health reinsurance business delivered another sizeable contribution to total Group net income in the reporting period just ended. The positive development and stability clearly demonstrated the underlying profitability of the portfolio. Bearing in mind that the sustained profitability of what is in some cases very long-term business does not always begin immediately when a treaty is written, a multi-year perspective is essential in order to make well-founded assessments. Non-recurring effects – both positive and negative – can lead to volatility in the results.
The result for the year under review is largely in line with our expectations for the overall profitability of our life business. The operating profit for 2015 had, however, been boosted by a one-time positive effect of EUR 39 million due to the early termination of a large contract, and to this extent the result in the year under review came in lower.
Gross premium decreased by 7.5% and amounted to EUR 7.1 billion (EUR 7.7 billion). Adjusted for exchange rate effects, this is equivalent to a decline of 4.3%. The decisive factor here was the extraordinary premium growth in 2015. The Value of New Business totalled EUR 893 million and thus beat the targeted level of EUR 220 million.
Our investment income declined to EUR 638.9 million (EUR 709.2 million) in the financial year just ended. This decrease is in line with our expectations. Of the total investment income, EUR 330.8 million (EUR 334.3 million) was attributable to assets under own management and the remaining EUR 308.1 million (EUR 374.9 million) derived from securities deposited with ceding companies.
As reported at the outset, the operating profit (EBIT) fell short of the level in the previous year, which had been boosted by a positive one-off effect. We are nevertheless satisfied with the generated result of EUR 343.3 million (EUR 405.1 million). The EBIT margins achieved within the individual reporting categories were as follows: in mortality and morbidity business we missed the 6% target with an EBIT margin of 3.4%; longevity business reached its stated target of 2% with an EBIT margin of 2.2%; the EBIT margin for financial solutions business amounted to 18.5%, thereby comfortably beating the minimum target of 2%. All in all, life and health reinsurance business thus contributed an amount of EUR 252.9 million (EUR 289.6 million) to Group net income.