Letter from the Chairman of the Executive Board

Dear Shareholders, Ladies and Gentlemen

Jean-Jacques Henchoz,
Chairman of the
Executive Board

When I wrote to you here last year the world was in the grips of an "exceptional situation". One year on and Covid-19 is still affecting our everyday lives. Faced with new variants and waves of the virus, it seems as if we are still far removed from the long-awaited return to normality. Yet considerable progress has certainly been made in fighting the virus. Multiple vaccines offering robust protection against the most severe disease are now available, and there are effective treatment methods and drug therapies. Nevertheless, we have still to put the pandemic behind us and the coronavirus continues to take a toll on human life.

As a reinsurer, our task is to make the financial impacts of such catastrophic events manageable. In the 2021 financial year Hannover Re consequently made significant payments to its customers in connection with the pandemic. Additional expenditures were incurred for losses from devastating natural disasters such as the flash floods in Germany caused during the summer by the low-pressure system "Bernd" or hurricane "Ida" in the United States.

Our sympathies go out to all those who have lost family or friends to the pandemic or natural catastrophes or who have been otherwise impacted by them. Hannover Re will continue to play its part in mitigating the financial impacts of such misfortunes. I would like to take this opportunity to expressly extend my thanks to our employees, whose dedication has been a crucial factor in our success and helps to ensure that we – as a company – are able to operate in such a seamless, prudent and reliable manner.

Hannover Re's commercial success is the cornerstone that puts us in a position to fulfil our commitments to our customers at all times. Hannover Re is well placed, in both operational and financial terms. In these challenging times we are thus able to support our customers through both our advice and our actions. We shall further step up our efforts in matters of risk protection, for example by contributing our risk management expertise to debates and ideas centred around preventing future losses and by helping to design innovative coverage concepts.

Despite all this, though, we cannot lose sight of the greatest challenge of our time: global warming. The disastrous flooding in Europe, record high temperatures and the series of damaging tornados in North America have once again shown us in 2021 what lies ahead if the change in the climate continues to progress. On a positive note, we have seen that the Climate Change Conference in Glasgow brought the fight against climate change back into sharper focus. The fact that the insurance industry is increasingly moving towards greater sustainability also gives me a sense of optimism. As one of the largest reinsurers in the world, we shall work with our customers to actively shape this change.

We are conscious of the responsibility for our planet. Now that Hannover Re has joined the UN-convened Net-Zero Insurance Alliance we have taken the next concrete step in the progressive expansion of our commitment to sustainability. We support the transition to a climate-friendly economy.

With a successful business policy and solid results we establish the foundation that gives us the greatest possible scope for action when it comes to sustainability. This is all the more important in times of uncertainty. In addition to the pandemic and natural disasters, the world economy is facing new challenges. The sharp rise in inflation appears to be bringing to an end the policy of quantitative easing pursued by central banks for more than a decade. It remains to be seen what the consequences of this will ultimately be.

At Hannover Re we shall therefore continue to do everything in our power to preserve our major strengths: profitable growth and successful cycle management, long-term and partnership-based customer relationships, a lean operating model and highly efficient capital management.

That we are staying the course is borne out by the good result for the financial year just ended – with Group net income up by 39 percent to EUR 1.23 billion and a solid capital adequacy ratio under Solvency II of 243 percent. We are further underscoring our financial stability and profitability by adjusting our dividend policy, which sees us aiming for at least a stable ordinary dividend going forward. Our dividend proposal for the financial year just ended therefore amounts to EUR 5.75. This consists of an unchanged ordinary dividend of EUR 4.50 and a special dividend of EUR 1.25. The message is clear: we offer our capital providers, our customers and our business partners reliability in an uncertain world.

In closing, I would like to express the hope that in the coming year I will only be reporting in passing on Covid-19 and that we will all be living with fewer restrictions. I would also like to thank you most sincerely for the trust that you, our valued shareholders as well as our clients and business partners, place in us each and every day. I do this on behalf of the entire Executive Board and all the employees of Hannover Re.

We shall continue to do our utmost to ensure that Hannover Re remains just the way it is: reliable, profitable and "somewhat different".
Yours sincerely,

Jean-Jacques Henchoz
Chairman of the Executive Board