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Very favourable business development in 1996

Double-digit dividend increase planned


Hannover Re shares upgraded: Analysts have changed their recommendation from 'neutral' to 'outperformer'


Hannover, 31 January 1997:

As Hannover Re states in its interim report of today, the company's business development is favourable both for the company and group alike. According to the report, shareholders will participate in a double-digit percentage dividend increase. In so doing, Hannover Re will continue to offer one of the highest dividend yields on the German stock market.Notwithstanding difficult market conditions, the Hannover Re Group accomplished an increase in its gross premium income of over 3 % to DM 6.2 billion.Compared to 1995, the group's self-administered investments have increased by about 15 % to DM 13.8 billion. As a result of this, Hannover Re anticipates the investment income to increase by more than 20 % to about DM 750 million. The underwriting results are expected to deteriorate slightly due to investment activities in strategic fields of growth, namely the heavily expanding life and health sector. In spite of the financial strain resulting from these activities, the group expects pre-tax results to increase to about DM 130 million in 1996 versus DM 116 million in 1995.

For 1997, Hannover Re anticipates its gross premium income and profitability to further increase. The company will concentrate its efforts on expanding its market share in North America, Japan and South East Asia/China as well as in life and - especially - in non-conventional reinsurance, where Hannover Re will give top priority to maintain its worldwide leading position in the alternative risk transfer sector.In view of the company's solid figures and increased accent on shareholder value, in a recently published report by Vereinsbank Research, their analysts have changed their recommendation from 'neutral' to 'outperformer'.

Even at a very conservative estimate, this German bank predicts the company's DM 5 shares have a potential to increase to far more than DM 100.The positive outlook for Hannover Re shares has already been observed in the market. A short while ago, the share price for the first time exceeded the issue price of DM 75. As far as the further development of the share price is concerned, the company also regards the listing of its share in the MDAX as very helpful.