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Hannover Re steps up in Financial Reinsurance

Frankfurt, 4 June 1998:

Hannover Re is firmly resolved to expand substantially its strategic business segment of financial reinsurance in which it has and holds a leading position since the late 70ies. To this end, the company has reported its decision to implement an entire package of measures: a successful application has been made to obtain a rating for the underwriting companies and capital increases have been approved; furthermore, in future this business segment is to be cultivated under a new brand name.

According to a statement by the company, the financial reinsurers belonging to the Hannover Re Group - Hannover Re (Ireland) Ltd. (HRI) and E+S Re (Ireland) Ltd. (ESI) -, which have been based at the International Financial Services Centre (IFSC) in Dublin since 1992, can look back on a highly successful development. The financial reinsurance consortium of Hannover Re, to which HRI, ESI and - although it is not part of the Hannover Re Group - HDI Re (Ireland) Ltd. (HDIRI) belong under the auspices of a joint management company, increased its gross premium as at 31.12.1997 to more than DM 900 million. This year the limit of one billion is supposed to be exceeded clearly. Two-thirds of this amount derived from the USA. Further geographical diversification of Hannover Re's business and vigorous expansion is planned for the future, especially in the non-American markets (primarily Asia, Australia and South Africa). In order to adjust the capitalization in line with the enlarged business volume, the capital of HRI is to be increased by DM 100 million to DM 350 million and that of ESI by DM 80 million to DM 280 million. The statement added that the Supervisory Board had already approved these resolutions of the Executive Board. With total capital resources of DM 870 million (including HDIRI), the financial reinsurance consortium of Hannover Re remains the largest insurer at the IFSC.

The company added that - particularly in the area of financial reinsurance - capital resources and a sound rating are an indispensable criterion for broad acceptance in the world markets. It pointed out, however, that a rating can be awarded no sooner than 5 years after the establishment of a company. The Hannover Re Group seized the first available opportunity, and the two companies HRI and ESI have received the second-highest rating of A+ (Superior) from the US rating agency A.M. Best.

The financial reinsurance consortium of Hannover Re specializes in customized reinsurance products to protect and stabilize insurance companies' balance sheets throughout the world. Especially in Asia these products are intensively asked for. Internally, they have already been referred to as "Advanced Solutions" for the past two years. This label will now be adopted for external purposes too, and the joint management company of the Irish financial reinsurance consortium will henceforth operate under the name Hannover Re Advanced Solutions, Ltd.