Annual Report 2016

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Property & Casualty reinsurance Life & Health reinsurance Investments
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5. Segment reporting

Based on the “management approach” of IFRS 8, which requires segment information to be presented as it is reported internally to management and normally used by the chief operating decision maker to decide upon the allocation of resources to a segment and evaluate its performanc, Hannover Re has identified the reportable segments of property & casualty reinsurance and life & health reinsurance. With regard to the object of business operations within the two segments please see the corresponding remarks in the management report.

The segment information shown follows the system used for internal reporting purposes, on the basis of which the full Executive Board regularly evaluates the performance of segments and decides on the allocation of resources to them.

The “Consolidation” column includes not only the elimination of cross-segment transactions but also, more significantly, companies whose business operations cannot be unambiguously allocated to property and casualty reinsurance or life and health reinsurance. These are principally the service and financing companies belonging to the Group.

During the financial year no material changes occurred in the organisational structure that could have influenced the composition of the segments. Since the performance indicators used to steer the segments correspond to the system according to which the consolidated financial statement is prepared, a separate reconciliation of the segment results with the Group result is not provided.

Both The Congregational & General Insurance Public Limited Company (CGI), Bradford, UK, Glencar Underwriting Managers Inc., Chicago, USA, and the special purpose property companies 101BOS LLC and 3290ATL LLC, both of which have their registered office in Wilmington, USA – which were consolidated for the first time in 2016 – and Oval Office Grundstücks GmbH, Hannover, and 300 South Orange Avenue, LLC, Orlando, USA – which were deconsolidated – are allocated to the property and casualty reinsurance segment.

Table as Excel file: 
Consolidated segment report as at 31 December
Segmentation of assets Property and casualty reinsurance Life and health reinsuranceConsolidationTotal
in EUR thousand 31.12.2016 31.12.20151 31.12.201631.12.2015131.12.201631.12.2015131.12.201631.12.20151
Assets
Fixed-income securities – held to maturity 342,793 810,256 134,045163,8908,11733,519484,9551,007,665
Fixed-income securities – loans and receivables 2,539,270 2,807,317 24,32462,548––2,563,5942,869,865
Fixed-income securities – available for sale 24,337,185 21,779,850 7,831,8897,598,15313,099238,44532,182,17329,616,448
Equity securities – available for sale 905,307 452,108 ––––905,307452,108
Financial assets at fair value through profit or loss 73,352 110,836 224,23037,748––297,582148,584
Other invested assets 3,391,140 3,236,748 210,413109,57470,6771773,672,2303,346,499
Short-term investments 259,598 244,817 565,899839,12213,490800838,9871,084,739
Cash and cash equivalents 579,112 638,305 267,623177,5371,9325,153848,667820,995
Total investments and cash under own management 32,427,757 30,080,237 9,258,4238,988,572107,315278,09441,793,49539,346,903
Funds withheld 1,263,533 1,284,958 10,409,72612,516,887––11,673,25913,801,845
Contract deposits (105) 497 170,610188,107––170,505188,604
Total investments 33,691,185 31,365,692 19,838,75921,693,566107,315278,09453,637,25953,337,352
Reinsurance recoverables on unpaid claims 1,250,770 1,070,380 255,716325,515(194)(614)1,506,2921,395,281
Reinsurance recoverables on benefit reserve – – 1,189,4201,367,173––1,189,4201,367,173
Prepaid reinsurance premium 133,858 162,529 1,0691,517–(23)134,927164,023
Reinsurance recoverables on other reserves 3,590 6,860 8,6411,827––12,2318,687
Deferred acquisition costs 758,429 696,406 1,439,6601,398,264–12,198,0892,094,671
Accounts receivable 2,130,342 2,167,691 1,547,7401,498,436(52)(190)3,678,0303,665,937
Other assets in the segment 1,115,251 1,334,802 723,648675,435(681,631)(828,423)1,157,2681,181,814
Assets held for sale 15,086 – ––––15,086–
Total assets 39,098,511 36,804,360 25,004,65326,961,733(574,562)(551,155)63,528,60263,214,938
            
Segmentation of liabilities
in EUR thousand
Liabilities
Loss and loss adjustment expense reserve 24,010,367 22,822,777 4,119,2453,734,225(194)(614)28,129,41826,556,388
Benefit reserve – – 10,289,85412,206,721–(22)10,289,85412,206,699
Unearned premium reserve 3,171,056 3,019,217 169,595140,146––3,340,6513,159,363
Provisions for contingent commissions 127,865 119,668 234,525205,860––362,390325,528
Funds withheld 456,877 425,360 777,196839,675––1,234,0731,265,035
Contract deposits (3,628) 4,448 4,301,9714,678,036––4,298,3434,682,484
Reinsurance payable 675,669 655,157 539,581735,027786(178)1,216,0361,390,006
Long-term liabilities 313,378 308,484 ––1,490,8401,489,8531,804,2181,798,337
Other liabilities in the segment 2,150,083 2,135,696 1,659,7121,747,491(696,723)(829,559)3,113,0723,053,628
Total liabilities 30,901,667 29,490,807 22,091,67924,287,181794,709659,48053,788,05554,437,468
1 Adjusted pursuant to IAS 8 (cf. section 3.1)
Table as Excel file: 
Consolidated segment report as at 31 December
Segment statement of income Property and casualty reinsurance Life and health reinsurance Consolidation Total
in EUR thousand 1.1. – 31.12.2016 1.1. – 31.12.2015 1.1. – 31.12.2016 1.1. – 31.12.2015 1.1. – 31.12.2016 1.1. – 31.12.2015 1.1. – 31.12.2016 1.1. – 31.12.2015
Gross written premium 9,204,554 9,337,973 7,149,023 7,730,885 45 (195) 16,353,622 17,068,663
thereof
From insurance business with other segments – – (45) 195 45 (195) – –
From insurance business with external third parties 9,204,554 9,337,973 7,149,068 7,730,690 – – 16,353,622 17,068,663
Net premium earned 7,985,047 8,099,717 6,432,387 6,492,412 181 913 14,417,615 14,593,042
Net investment incom 900,919 944,962 638,898 709,173 10,603 10,958 1,550,420 1,665,093
thereof
Change in fair value of financial instruments 2,452 851 23,702 50 (88) – 26,066 901
Total depreciation, impairments and appreciation of investments 75,997 35,556 31 177 – 2,365 76,028 38,098
Income / expense on funds withheld and contract deposits 24,031 20,162 308,118 374,871 – – 332,149 395,033
Claims and claims expenses 5,330,662 5,616,450 5,480,293 5,458,957 370 – 10,811,325 11,075,407
Change in benefit reserve – – 80,490 101,123 22 34 80,512 101,157
Commission and brokerage, change in deferred acquisition costs and other technical
income / expenses		 1,975,912 1,849,059 1,032,384 1,075,078 2 2 3,008,298 2,924,139
Administrative expenses 199,380 201,962 201,973 197,254 192 (704) 401,545 398,512
Other income and expenses (39,720) (35,900) 67,122 35,919 (4,409) (3,703) 22,993 (3,684)
Operating profit / loss (EBIT) 1,340,292 1,341,308 343,267 405,092 5,789 8,836 1,689,348 1,755,236
Interest on hybrid capital – – – – 71,693 84,316 71,693 84,316
Net income before taxes 1,340,292 1,341,308 343,267 405,092 (65,904) (75,480) 1,617,655 1,670,920
Taxes 339,064 368,383 86,522 109,713 (34,357) (21,889) 391,229 456,207
Net income 1,001,228 972,925 256,745 295,379 (31,547) (53,591) 1,226,426 1,214,713
thereof
Non-controlling interest in profit or loss 51,337 58,198 3,860 5,790 – – 55,197 63,988
Group net income 949,891 914,727 252,885 289,589 (31,547) (53,591) 1,171,229 1,150,725
4.5 Other corporate changes
6. Notes on the individual items of the balance sheet : 6.1 Investments under own management
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5. Segment reporting

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