Hannover Re share reaches a new all-time high

The Hannover Re share stood at EUR 104.90 going into the year. By 3 January 2018 it had already touched its lowest point of the year at EUR 104.70. Against the backdrop of the numerous large losses incurred in 2017, Hannover Re made the most of the opportunities on the reinsurance markets in the treaty renewals as at 1 January 2018 and substantially expanded its portfolio in keeping with the company’s selective and margin-focused underwriting policy. In this context the share price rose steadily until March and remained stable through the second quarter. With a view to stemming the negative earnings situation that had prevailed for a number of years in US mortality business, management exercised its right to implement consistent rate increases across the board. The resulting right of ceding companies to recapture treaties, however, led to considerable pre-tax strains on the IFRS result in life and health reinsurance over the year as a whole. The announcement of this development in connection with the half-yearly results was, however, well received thanks to the clear delimitation of the losses, the associated favourable earnings prospects going forward and the confirmed profit guidance for the full year. The share consequently continued to rise in price and on 9 November, a day after the nine-month results were released, it climbed to its highest point of the year – and new all-time high – of EUR 125.30. The upward trend was also supported by a shift in market sentiment. Against a backdrop of geopolitical and economic uncertainties as well as early indications of a slowdown in global economic growth, defensive securities such as insurance and reinsurance stocks moved back into focus for investors.

At the end of the financial year the Hannover Re share closed with a gain of 12.2% at EUR 117.70, delivering a performance of 17.1% including reinvested dividends. Looked at over the year as a whole, the Hannover Re share thus significantly outperformed its domestic benchmark indices, namely the DAX (-18.3%) and MDAX (-17.6%) as well as the international Global Reinsurance (Performance) Index (+7.2%). Since 2018 the Global Reinsurance Index has tracked the share performance including dividend payments of the world’s largest 10 (previously largest 15) reinsurers. Hannover Re measures its performance by this benchmark index.

In a three-year comparison the Hannover Re share delivered a performance (including reinvested dividends) of 27.6%. From a longer-term perspective it thus also continues to comfortably outperform the benchmark DAX (-1.7%) and MDAX (3.9%) indices as well as the Global Reinsurance Index (13.9%).

Based on the year-end closing price of EUR 117.70, Hannover Re’s market capitalisation totalled EUR 14.2 billion at the end of the 2018 financial year, an increase of EUR 1.5 billion or 12.2% compared to the previous year’s figure of EUR 12.7 billion. According to the rankings drawn up by Deutsche Börse AG, the company placed fifth in the MDAX at the end of December with a free float market capitalisation of EUR 7,146.4 million and eighteenth with a trading volume of EUR 4,921.5 million over the past twelve months.

With a book value per share of EUR 72.78 the Hannover Re share showed a price-to-book (P / B) ratio of 1.62 at the end of the year under review; compared both to the average MDAX P / B ratio of 1.55 as at year-end and the P / B ratio for the peer group, the share thus continues to be significantly better valued.