The 2018 financial year was a pleasing one for Hannover Rück SE. The gross premium of Hannover Rück SE in total business grew by 10.1% to EUR 14.6 billion (previous year: EUR 13.3 billion). The level of retained premium retreated from 78.4% to 71.8%. Net premium earned increased by 2.0% to EUR 10.4 billion (EUR 10.2 billion).
|Condensed profit and loss account of Hannover Rück SE|
|in EUR thousand||2018||2017|
|Earned premiums, net of retrocession||10,412,941||10,208,864|
|Allocated investment return transferred from the non-technical account, net of retrocession||203,602||185,841|
|Other technical income, net of retrocession||174||–|
|Claims incurred, net of retrocession||7,787,352||7,636,262|
|Changes in other technical provisions, net of retrocession||(144,470)||(177,799)|
|Bonuses and rebates, net of retrocession||(50)||(139)|
|Operating expenses, net of retrocession||2,685,118||2,593,164|
|Other technical charges, net of retrocession||23||277|
|Change in the equalisation reserve and similar provisions||25,270||165,944|
|Net technical result||25,074||153,286|
|Allocated investment return transferred to the technical account||(204,465)||(186,558)|
|Profit or loss on ordinary activities before tax||869,708||967,999|
|Taxes on profit and income and other taxes||204,353||124,599|
|Profit for the financial year||665,355||843,400|
|Profit brought forward from previous year||671,014||431,014|
|Allocations to other retained earnings||369||414|
The underwriting result (before changes in the equalisation reserve) improved in the year under review from EUR -12.7 million to EUR -0.2 million. Following a withdrawal of EUR 165.9 million in the previous year, an amount of EUR 25.3 million was withdrawn from the equalisation reserve and similar provisions in the year under review.
After a thoroughly moderate major loss experience in the first half of 2018, the volume of losses incurred in the third and especially the fourth quarter was significantly higher. The burden of large losses consequently came in slightly above the large loss budget that we had set aside. The total net expenditure on major losses incurred by Hannover Rück SE was EUR 536.6 million (EUR 689.8 million).
Ordinary investment income including deposit interest was clearly higher than in the previous year at EUR 1,234.0 million (EUR 1,002.9 million), principally due to increased distributions from our investment holding companies as well as stronger ordinary income from fixed-income securities. Despite the continued low level of interest rates, the latter showed a pleasing rise to EUR 458.6 million (EUR 419.0 million) based on the substantial asset volume. Net gains of EUR 140.9 million (EUR 247.9 million) were realised on disposals. The sharp decline can be attributed for the most part to the liquidation of our portfolio of non-strategic listed equities in the previous year. Write-downs of EUR 88.4 million (EUR 20.7 million) were taken on investments, primarily on bearer debt securities held as current assets. The write-downs contrasted with write-ups of EUR 1.2 million (EUR 13.7 million) that were made on assets written down in previous periods in order to reflect increased fair values.
All in all, the net investment result climbed to EUR 1,231.7 million (EUR 1,197.5 million). The balance of other income and charges changed from EUR -196.3 million to EUR -182.6 million.
The profit on ordinary activities decreased to EUR 869.7 million (EUR 968.0 million). The year under review closed with a profit for the year of EUR 665.4 million (EUR 843.4 million).