Hannover Rück : Financial Supplement

Financial Supplement as at 30 June 2021

Key figures

Key figures
Figures in EUR million	2021	2020
1.1.-31.3.1	1.4.-30.6.	+/- previous year	1.1.-30.6.	+/- previous year	1.4. -30.6.	1.1.-30.6.	31.12.1
Results
Gross written premium	7,809.3	6,655.3	+7.9%	14,464.6	+10.0%	6,170.8	13,146.1
Net premium earned	5,692.7	5,822.6	+10.1%	11,515.3	+11.0%	5,287.2	10,378.1
Net underwriting result2	25.4	98.9	124.3	-285.5	-330.4
Net investment income	441.1	424.7	+32.1%	865.8	+9.2%	321.4	793.1
Operating profit (EBIT)	403.8	552.3	956.1	+89.9%	76.9	503.5
Group net income	305.9	364.7	670.6	+66.7%	101.5	402.4
Balance sheet
Policyholders' surplus	14,822.2	14,859.2	+5.6%	13,715	14,071.0
Equity attributable to shareholders of Hannover Rück SE	11,043.0	11,050.6	+0.5%	10,688	10,995.0
Non-controlling interests	803.3	831.7	-1.5%	792	844.4
Hybrid capital	2,976.0	2,976.9	+33.4%	2,236	2,231.6
Investments (excl. funds withheld by ceding companies)	52,282.9	52,847.7	+7.8%	48,768	49,001.6
Total assets	77,038.8	78,099.2	+9.3%	73,307	71,437.5
Share
Earnings per share (basic and diluted) in EUR	2.54	3.02	5.56	+66.7%	0.84	3.34
Book value per share in EUR	91.57	91.63	+0.5%	88.62	91.17
Share price at year-end in EUR	155.80	141.10	-8.0%	153.40	130.30
Market capitalisation at year-end	18,789.0	17,016.3	-8.0%	18,499.6	15,713.8
Ratios
Combined ratio (property and casualty reinsurance)2	96.2%	95.7%	96.0%	104.8%	102.3%
Large losses as percentage of net premium earned (property and casualty reinsurance)3	5.0%	3.3%	4.2%	12.8%	10.7%
Retention	91.5%	89.2%	90.4%	90.4%	90.8%
Return on investment (excl. funds withheld by ceding companies)	2.5%	2.9%	2.7%	2.2%	2.7%
EBIT margin4	7.1%	9.5%	8.3%	1.5%	4.9%
Return on equity (after tax)	11.1%	13.2%	12.2%	3.8%	7.6%
1 Restated pursuant to IAS 8
2 Including expenses on funds withheld and contract deposits
3 Hannover Re Group's net share for natural catastrophes and other major losses in excess of EUR 10 million gross as a percentage of net premium earned
4 Operating result (EBIT)/net premium earned

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B-S

Consolidated balance sheet as at 30 June 2021
Assets in EUR thousand	30/6/2021	31.12.20201
Fixed-income securities - held to maturity	122,502	185,577
Fixed-income securities - loans and receivables	2,417,429	2,312,840
Fixed-income securities - available for sale	42,173,861	38,851,723
Fixed-income securities - at fair value through profit or loss	72,599	105,711
Equity securities - available for sale	294,896	378,422
Other financial assets - at fair value through profit or loss	195,783	234,689
Investment property	1,615,554	1,589,238
Real estate funds	657,817	582,296
Investments in associated companies	378,822	361,617
Other invested assets	3,058,285	2,794,016
Short-term investments	415,046	327,426
Cash and cash equivalents	1,445,138	1,278,071
Total investments and cash under own management	52,847,732	49,001,626
Funds withheld	10,384,676	9,659,807
Contract deposits	333,651	298,344
Total investments	63,566,059	58,959,777
Reinsurance recoverables on unpaid claims	1,860,654	1,883,270
Reinsurance recoverables on benefit reserve	198,401	192,135
Prepaid reinsurance premium	269,873	165,916
Reinsurance recoverables on provision on contingent commissions	1,255	1,106
Deferred acquisition costs	3,505,784	3,073,117
Accounts receivable	7,198,300	5,605,803
Goodwill	83,420	80,965
Deferred tax assets	586,779	597,986
Other assets	809,155	859,136
Accrued interest and rent	19,566	18,264
Total assets	78,099,246	71,437,475
Liabilities in EUR thousand	30/6/2021	31.12.2020
Loss and loss adjustment expense reserve	36,651,416	33,929,230
Benefit reserve	7,434,973	7,217,988
Unearned premium reserve	6,894,663	5,070,009
Other technical provisions	761,063	701,577
Funds withheld	643,216	582,316
Contract deposits	3,571,560	3,255,453
Reinsurance payable	2,067,340	1,777,761
Provisions for pensions	209,726	229,252
Taxes	167,400	132,736
Deferred tax liabilities	2,749,826	2,731,648
Other liabilities	887,991	538,813
Financing liabilities	4,177,745	3,431,276
Total liabilities	66,216,919	59,598,059
Shareholders' equity
Common shares	120,597	120,597
Nominal value: 120,597 Conditional capital: 60,299
Additional paid-in capital	724,562	724,562
Common shares and additional paid-in capital	845,159	845,159
Cumulative other comprehensive income
Unrealised gains and losses on investments	1,888,838	2,275,936
Cumulative foreign currency translation adjustment	-25,625	-330,693
Changes from hedging instruments	-10,718	-8,678
Other changes in cumulative other comprehensive income	-72,502	-83,792
Total other comprehensive income	1,779,993	1,852,773
Retained earnings	8,425,448	8,297,114
Equity attributable to shareholders of Hannover Rück SE	11,050,600	10,995,046
Non-controlling interests	831,727	844,370
Total shareholders' equity	11,882,327	11,839,416
Total liabilities	78,099,246	71,437,475
1 Restated pursuant to IAS 8

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P&L (ytd)

Consolidated statement of income as at 30 June 2021
In EUR thousand	1.1. - 30.6.2021	1.1. - 30.6.2020
Gross written premium	14,464,599	13,146,136
Ceded written premium	1,384,543	1,213,743
Change in gross unearned premium	-1,662,374	-1,628,703
Change in ceded unearned premium	97,616	74,394
Net premium earned	11,515,298	10,378,084
Ordinary investment income	681,701	607,661
Profit/loss from investments in associated companies	16,019	6,431
Realised gains and losses on investments	142,021	139,825
Change in fair value of financial instruments	-43,141	50,648
Total depreciation, impairments and appreciation of investments	38,372	85,101
Other investment expenses	64,578	62,659
Net income from investments under own management	693,650	656,805
Income/expense on funds withheld and contract deposits	172,151	136,278
Net investment income	865,801	793,083
Other technical income	112	-
Total revenues	12,381,211	11,171,167
Claims and claims expenses	8,630,539	8,198,297
Change in benefit reserves	-113,501	-145,482
Commission and brokerage, change in deferred acquisition costs	2,785,581	2,546,594
Other acquisition costs	2,243	2,376
Administrative expenses	258,435	242,944
Total technical expenses	11,563,297	10,844,729
Other income	396,181	399,980
Other expenses	257,988	222,909
Other income/expenses	138,193	177,071
Operating profit/loss (EBIT)	956,107	503,509
Financing costs	40,125	47,104
Net income before taxes	915,982	456,405
Taxes	212,145	51,464
Net income	703,837	404,941
thereof
Non-controlling interest in profit and loss	33,285	2,589
Group net income	670,552	402,352
Earnings per share (in EUR)
Basic earnings per share	5.56	3.34
Diluted earnings per share	5.56	3.34

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P&L (q)

Consolidated statement of income as at 30 June 2021
In EUR thousand	Q2/2021	Q2/2020
Gross written premium	6,655,335	6,170,847
Ceded written premium	721,499	590,057
Change in gross unearned premium	-155,029	-290,593
Change in ceded unearned premium	43,784	-2,972
Net premium earned	5,822,591	5,287,225
Ordinary investment income	371,463	281,401
Profit/loss from investments in associated companies	3,807	5
Realised gains and losses on investments	51,839	37,961
Change in fair value of financial instruments	6,558	39,004
Total depreciation, impairments and appreciation of investments	17,318	56,532
Other investment expenses	33,254	31,105
Net income from investments under own management	383,095	270,734
Income/expense on funds withheld and contract deposits	41,650	50,691
Net investment income	424,745	321,425
Other technical income	50	-
Total revenues	6,247,386	5,608,650
Claims and claims expenses	4,244,768	4,273,343
Change in benefit reserves	-61,214	-60,693
Commission and brokerage, change in deferred acquisition costs	1,448,401	1,281,082
Other acquisition costs	1,154	1,273
Administrative expenses	132,326	128,450
Total technical expenses	5,765,435	5,623,455
Other income	134,650	110,647
Other expenses	64,328	18,978
Other income/expenses	70,322	91,669
Operating profit/loss (EBIT)	552,273	76,864
Financing costs	21,405	23,643
Net income before taxes	530,868	53,221
Taxes	146,296	-42,688
Net income	384,572	95,909
thereof
Non-controlling interest in profit and loss	19,913	-5,566
Group net income	364,659	101,475
Earnings per share (in EUR)
Basic earnings per share	3.02	0.85
Diluted earnings per share	3.03	0.85

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B-S Segments

Consolidated segment report as at 30 June 2021
Segmentation of assets	Property and casualty reinsurance	Life and health reinsurance	Consolidation	Total
in EUR thousand	30/6/2021	31.12.20201	30/6/2021	31.12.20201	30/6/2021	31.12.2020	30/6/2021	31.12.20201
Assets
Fixed-income securities - held to maturity	100,109	139,867	22,393	45,710	-	-	122,502	185,577
Fixed-income securties - loans and receivables	2,071,225	1,998,611	330,708	299,180	15,496	15,049	2,417,429	2,312,840
Fixed-income securities - available for sale	32,009,122	29,422,685	10,146,024	9,429,038	18,715	-	42,173,861	38,851,723
Equity securities - available for sale	294,896	378,422	-	-	-	-	294,896	378,422
Financial assets at fair value through profit or loss	85,027	110,304	183,355	230,096	-	-	268,382	340,400
Other invested assets	4,772,830	4,384,139	934,047	920,960	3,601	22,068	5,710,478	5,327,167
Short-term investments	273,362	244,474	141,152	82,221	532	731	415,046	327,426
Cash and cash equivalents	1,027,681	901,989	414,203	371,972	3,254	4,110	1,445,138	1,278,071
Total investments and cash under own management	40,634,252	37,580,491	12,171,882	11,379,177	41,598	41,958	52,847,732	49,001,626
Funds withheld	3,154,532	2,569,420	7,230,144	7,090,387	-	-	10,384,676	9,659,807
Contract deposits	3,216	5,404	330,435	292,940	-	-	333,651	298,344
Total investments	43,792,000	40,155,315	19,732,461	18,762,504	41,598	41,958	63,566,059	58,959,777
Reinsurance recoverables on unpaid claims	1,709,002	1,730,507	151,652	152,763	-	-	1,860,654	1,883,270
Reinsurance recoverables on benefit reserve	-	-	198,401	192,135	-	-	198,401	192,135
Prepaid reinsurance premium	269,725	165,834	305	82	-157	-	269,873	165,916
Reinsurance recoverables on other reserves	528	562	727	544	-	-	1,255	1,106
Deferred acquisition costs	1,613,544	1,169,521	1,892,240	1,903,596	-	-	3,505,784	3,073,117
Accounts receivable	5,568,267	4,155,372	1,630,033	1,450,628	-	-197	7,198,300	5,605,803
Other assets in the segment	3,338,973	2,788,243	509,981	470,282	-2,350,034	-1,702,174	1,498,920	1,556,351
Total assets	56,292,039	50,165,354	24,115,800	22,932,534	-2,308,593	-1,660,413	78,099,246	71,437,475
Segmentation of liabilities
in EUR thousand
Liabilities
Loss and loss adjustment expense reserve	31,410,006	29,194,354	5,241,410	4,734,876	-	-	36,651,416	33,929,230
Benefit reserve	-	-	7,434,973	7,217,988	-	-	7,434,973	7,217,988
Unearned premium reserve	6,487,584	4,709,229	407,079	360,780	-	-	6,894,663	5,070,009
Provisions for contingent commissions	459,268	395,296	301,795	306,281	-	-	761,063	701,577
Funds withheld	390,599	342,420	252,617	239,896	-	-	643,216	582,316
Contract deposits	81,218	80,369	3,490,342	3,175,084	-	-	3,571,560	3,255,453
Reinsurance payable	1,420,582	1,157,650	647,072	620,111	-314	-	2,067,340	1,777,761
Financing liabilities	422,211	420,348	33,964	35,010	3,721,570	2,975,918	4,177,745	3,431,276
Other liabilities in the segment	2,907,195	2,478,161	3,464,341	2,863,934	-2,356,593	-1,709,646	4,014,943	3,632,449
Total liabilities	43,578,663	38,777,827	21,273,593	19,553,960	1,364,663	1,266,272	66,216,919	59,598,059
1 Restated pursuant to IAS 8

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P&L Segments (ytd)

Consolidated segment report as at 30 June 2021
Segment statement of income	Property and casualty reinsurance	Life and health reinsurance	Consolidation	Total
in EUR thousand	1.1. - 30.6.2021	1.1. - 30.6.2020	1.1. - 30.6.2021	1.1. - 30.6.2020	1.1. - 30.6.2021	1.1. - 30.6.2020	1.1. - 30.6.2021	1.1. - 30.6.2020
Gross written premium	10,266,540	9,174,203	4,198,059	3,971,933	-	-	14,464,599	13,146,136
Net premium earned	7,846,643	6,869,071	3,668,500	3,508,896	155	117	11,515,298	10,378,084
Net investment income	584,386	458,693	280,667	332,940	748	1,450	865,801	793,083
thereof
Change in fair value of financial instruments	4,133	-1,304	-47,274	51,952	-	-	-43,141	50,648
Total depreciation, impairments and appreciation of investments	38,356	83,273	16	1,828	-	-	38,372	85,101
Income/expense on funds withheld and contract deposits	14,705	25,524	157,446	110,754	-	-	172,151	136,278
Claims and claims expenses	5,272,484	5,009,822	3,358,055	3,188,475	-	-	8,630,539	8,198,297
Change in benefit reserve	-	-	-113,501	-145,482	-	-	-113,501	-145,482
Commission and brokerage, change in deferred acquisition costs and other technical income/expenses	2,146,392	1,934,217	641,320	614,753	-	-	2,787,712	2,548,970
Administrative expenses	125,718	111,286	132,937	131,390	-220	268	258,435	242,944
Other income/expenses	-108,530	17,577	248,706	161,451	-1,983	-1,957	138,193	177,071
Operating profit/loss (EBIT)	777,905	290,016	179,062	214,151	-860	-658	956,107	503,509
Financing costs	1,035	1,068	767	752	38,323	45,284	40,125	47,104
Net income before taxes	776,870	288,948	178,295	213,399	-39,183	-45,942	915,982	456,405
Taxes	152,522	42,661	72,508	23,958	-12,885	-15,155	212,145	51,464
Net income	624,348	246,287	105,787	189,441	-26,298	-30,787	703,837	404,941
thereof
Non-controlling interest in profit or loss	32,261	1,553	1,024	1,036	-	-	33,285	2,589
Group net income	592,087	244,734	104,763	188,405	-26,298	-30,787	670,552	402,352

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P&L Segments (q)

Consolidated segment report as at 30 June 2021
Segment statement of income	Property and casualty reinsurance	Life and health reinsurance	Consolidation	Total
in EUR thousand	Q2/2021	Q2/2020	Q2/2021	Q2/2020	Q2/2021	Q2/2020	Q2/2021	Q2/2020
Gross written premium	4,573,652	4,188,134	2,081,683	1,982,713	-	-	6,655,336	6,170,847
Net premium earned	3,983,586	3,531,051	1,838,850	1,756,115	155	59	5,822,591	5,287,225
Net investment income	315,843	162,268	108,689	158,284	214	873	424,745	321,425
thereof
Change in fair value of financial instruments	2,413	889	4,145	38,115	-	-	6,558	39,004
Total depreciation, impairments and appreciation of investments	17,310	56,223	8	309	-	-	17,317	56,532
Income/expense on funds withheld and contract deposits	11,162	15,169	30,488	35,522	-	-	41,650	50,692
Claims and claims expenses	2,629,876	2,668,298	1,614,892	1,605,044	-	-	4,244,768	4,273,342
Change in benefit reserve	-	-	61,215	60,693	-	-	61,215	60,693
Commission and brokerage, change in deferred acquisition costs and other technical income/expenses	1,130,783	988,485	318,722	293,871	-	-	1,449,555	1,282,356
Administrative expenses	64,666	57,340	68,004	70,976	-342	134	132,327	128,450
Other income/expenses	-8,266	6,101	79,949	84,731	-1,362	837	70,322	91,670
Operating profit/loss (EBIT)	465,838	-14,702	87,086	89,931	-651	1,635	552,272	76,864
Financing costs	514	525	373	374	20,518	22,744	21,405	23,644
Net income before taxes	465,324	-15,227	86,713	89,557	-21,169	-21,109	530,868	53,220
Taxes	114,806	-46,655	38,424	10,919	-6,936	-6,952	146,295	-42,688
Net income	350,518	31,428	48,288	78,638	-14,233	-14,157	384,573	95,908
thereof
Non-controlling interest in profit or loss	19,567	-6,025	346	458	-	-	19,913	-5,567
Group net income	330,950	37,453	47,942	78,180	-14,233	-14,157	364,659	101,475

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