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Management report
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Combined non-financial information statement
- Introduction
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Opportunity and risk report
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Risk report
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- Risk landscape of Hannover Re
- Internal risk assessment
- Underwriting risks in property and casualty reinsurance
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- Opportunity report
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Risk report
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Total result
The gross premium in our total business increased by 7.8% as at 31 December 2018 to EUR 19.2 billion (EUR 17.8 billion). Growth of 11.6% would have been booked at constant exchange rates. We thus met our guidance, which had anticipated an increase of more than 10%. The level of retained premium remained stable at 90.7% (90.5%). Net premium earned rose by 10.6% to EUR 17.3 billion (EUR 15.6 billion). At unchanged exchange rates the increase would have been 14.5%.
The operating profit (EBIT) improved by 17.0% to EUR 1,596.6 million (EUR 1,364.4 million). Group Net income was higher than in the previous year at EUR 1,059.5 million (EUR 958.6 million). We thus achieved our guidance of more than EUR 1 billion. Earnings per share for the Hannover Re Group stood at EUR 8.79 (EUR 7.95).
The equity position remains very robust: the equity attributable to shareholders of Hannover Re totalled EUR 8.8 billion (EUR 8.5 billion) as at 31 December 2018. The return on equity amounted to 12.2% (10.9%). The book value per share reached EUR 72.78 (EUR 70.72). Thanks to the fact that business developed largely in line with our expectations in the year under review, we were able to achieve and in some cases even substantially outperform the forecasts shown in the following table “Business development in the year under review”.
The total policyholders’ surplus, consisting of shareholders’ equity, non-controlling interests and hybrid capital, amounted to EUR 11.0 billion (EUR 10.8 billion) as at 31 December 2018.
With the publication of the annual financial statement we are also releasing the capital adequacy ratio of the Hannover Re Group calculated in accordance with the requirements of Solvency II. It decreased relative to the previous year to a level of 245.7% as at 31 December 2018 (31 December 2017: 260.3%).
| Business development in the year under review | ||
|---|---|---|
| Forecast 2018 | Target attainment 2018 | |
| Gross premium growth (Group) | Gross premium growth in the low single-digit percentage range or >10% 1, 2 | +11.6% at constant exchange rates +7.8% not adjusted for currency effects |
| Gross premium growth for Property & Casualty reinsurance | 3 to 5% 1 | +16.2% at constant exchange rates +11.8% not adjusted for currency effects |
| Gross premium growth for Life & Health reinsurance | 3 to 5% 1, 3 | +4.6% at constant exchange rates +1.7% not adjusted for currency effects |
| Return on investment 4 | ≥2.7% | 3.2% |
| Group net income | > EUR 1 billion 5 | EUR 1,059.5 million |
2 In the context of publication of the quarterly statement as at 31 March 2018 the guidance for gross premium growth (Group) was raised to more than 10%. 3 Organic growth only 4 Excluding ModCo derivatives 5 Assuming stable capital markets and / or major loss expenditure in 2018 that does not exceed EUR 825 million | ||