Explanatory Remarks
Notes on the statement of income
1. Gross/net
Gross items constitute the relevant sum total deriving from the acceptance of direct insurance policies or reinsurance treaties; retro items constitute the sum total of own reinsurance cessions. The difference is the corresponding net item.
(gross - retro = net, also: for own account)
2. Operating profit (EBIT)
EBIT (earnings before interest and taxes) is an internationally used earnings ratio that measures a company's operating profitability. It is calculated on the basis of the net income before interest, taxes on income and minority interests. It shows how much profit the company generates in order to be able to pay interest, taxes and dividends.
Notes on the balance sheet
3. Policyholders' surplus
The portion of the capital allocable to capital providers after deduction of all liabilities.
Stockholders' equity: Consists of the common stock, additional paid-in capital and retained earnings.
Minority interests: Interests of minority shareholders in the stockholders' equity and the income for the period under review. They arise when a consolidated subsidiary is not wholly owned by the group.
Hybrid capital: Subordinated capital that consists principally of participation certificates and other subordinated liabilities.
Key performance ratios
4. EBIT margin
Operating profit/loss (EBIT)/Net premium earned.
5. Return on equity
Group net income divided by weighted stockholders' equity. Including one-off effect from the acquisition of the ING Life Re portfolio (in 2009).
This figure is especially interesting for investors because it indicates the return generated on their invested capital.
6. Major losses as percentage of net premium earned (Non-life reinsurance)
Natural catastrophes and other major losses in excess of EUR 10 million gross for the Hannover Re Group's share.
7. Combined ratio
Including funds withheld.
If the aggregate loss/expense ratio is less than 100% the reinsurer has generated a profit on the insurance business (before investments).
Key figures relating to the share
8. Exchange Listings
ISIN: DE0008402215; Securities identification number: 840221; Ticker symbols: Bloomberg = HNR1, Thomson Reuters = HNRGn, ADR = HVRRY.
9. Earnings per share
Group net income divided by weighted number of shares.
Measures profitability in relation to the number of shares. Especially in American reporting the closest attention is paid to this ratio. Frequently, planned figures for a quarter or financial year are defined in terms of earnings per share.
10. Book value per share
Stockholders' equity divided by number of shares (120,597,134).
A good indicator of a company's net asset value.
11. Price to book value ratio
Share price at the end of the period/year end divided by book value per share.
Gives an initial impression of whether a share is cheaply priced (<1) or expensive (>2).
12. Price/earnings ratio
Share price at the end of the period/year end divided by earnings per share (in the current year divided by the analysts' expectations for earnings per share).
This provides a more accurate indication of whether a share is cheaply priced (<10) or expensive (>20).
13. Share performance (price development incl. dividend)
Share price performance relative to our internal benchmark, the RBS Global R/I Index.
The performance is the price development of the shares - including the dividend - in a defined period, with all earnings being reinvested. Reinvestment produces a compounding effect that favourably influences the aggregate performance of the investment.
14. Market capitalisation
Share price multiplied by number of shares.
The growth in market capitalisation reflects the value-added created by a company.
15. Dividend
The dividend is the pro-rata profit paid out by the company for one share. The dividend does not correspond to the total profit of a joint-stock corporation since the amount distributed is reduced prior to payment by reserve allocations etc. The company's Annual General Meeting decides on the amount and payment of the dividend. Unlike in the United Kingdom and United States, where dividends can also be paid quarterly, they are distributed annually in Germany.