Hannover Re Group released its 2011 financial results that showed achieving good income although loss expenditure of EUR 980.7 million for net account was the second-highest in the company’s history.
“The fact that we were still able to generate a pleasing profit shows that we are moving forward towards our goal of reducing the volatility of results”, Chief Executive Officer Ulrich Wallin noted. The return on equity of 12.8% surpassed the targeted level of 750 basis points above the risk-free interest rate.
Gross written premium in total business increased by 5.8% to EUR 12.1 billion (EUR 11.4 billion). At constant exchange rates – especially against the US dollar – growth would have come in at 7.5%. The level of retained premium climbed slightly to 91.2% (90.1%). Net premium earned rose 7.0% to EUR 10.8 billion (EUR 10.0 billion).
As anticipated, the operating profit (EBIT) of EUR 841.4 million as at 31 December 2011 fell short of the previous year’s figure (EUR 1.2 billion). Group net income amounted to EUR 606.0 million (EUR 748.9 million), comfortably beating the company’s guidance of EUR 500 million. This positive result can be attributed both to the quality of the underlying business and to very good investment income. The Group’s profit also benefited from the refund of excess taxes and interest paid thereon in an amount of EUR 128 million. Earnings per share stood at EUR 5.02 (EUR 6.21).
Despite the considerable strains from major losses, shareholders’ equity showed very positive growth. It increased by 10.2% relative to the level as at 31 December 2010 to reach EUR 5.0 billion (EUR 4.5 billion). The total policyholders’ surplus (including non-controlling interests and hybrid capital) grew by 5.0% to EUR 7.3 billion (EUR 7.0 billion).
“Particularly thanks to the further increase in our shareholders’ equity, we are able to pay a dividend for 2011 that is somewhat higher than our strategic dividend target of 35% to 40% of Group net income. The Executive Board and the Supervisory Board will therefore propose to the Annual General Meeting that a dividend of EUR 2.10 per share should be paid”, Mr. Wallin stated.
Hannover Re is looking to the current financial year with optimism. The treaty renewals as at 1 January 2012 in non-life reinsurance passed off satisfactorily for Hannover Re. For the current financial year the company anticipates – at unchanged exchange rates – gross premium growth in the range of 5% to 7%. Ina addition, Hannover Re has budgeted an amount of EUR 560 million for major losses.
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