Company FAQ
2. How is Hannover Re positioned in the worldwide reinsurance market?
Profitability first and foremost
We do not pursue targets defined in terms of volume, growth or market share. Our actions are guided solely by earnings considerations. We therefore concentrate on attractive segments of reinsurance business. For we seek to be one of the three most profitable reinsurers in the world.
Quantitative targets
Our strategic goal is to boost the operating profit (EBIT), earnings per share and book value per share by a double-digit percentage every year. Not only that, our minimum profit target is to generate a return on equity of 750 basis points above the 5-year average yield on 10-year German government bonds. The company has surpassed this goal eight times in the last 10 years. The average return on equity was almost 14 percent.
Diversification: Multi-specialist with a global footprint
We are not all things to all people. We specialise in what we are best at. Both in our non-life and life/health reinsurance business groups we concentrate on a number of strategically important and profitable lines of business. Traditional reinsurance business is complemented by innovative products. This strategy of diversification enables us to safeguard a positive overall result and a stable business development over the long term. Additional risk spreading by region and risk type, both across and within the individual business groups and lines of business, makes us the best diversified reinsurer in the world.
Innovative capital management
We take a proactive approach to capital management. Keeping the costs for our capital base as low as possible is a cornerstone of our strategy. For this reason, we prefer hybrid capital and other equity substitutes within the tolerances of the supervisory authorities and rating agencies. Hybrid capital is subordinated and typically long-term in nature, and it is therefore available on the capital markets at considerably more favourable conditions than equity capital. By raising capital in this way we can at the same time support our rating and ensure a consistently high return on equity.
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