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First US GAAP accounts of a German insurance organization

Hannover, 25 September 1998:

Wilhelm Zeller, Chairman of Hannover Re's Executive Board, presented a US GAAP (generally accepted accounting principles) reconciliation of the Group annual accounts at today's Annual General Meeting of the company. Mr. Zeller reported that the US GAAP accounts put the Group's equity at DM 2.565 billion, more than three times the value shown in accordance with the provisions of the German Commercial Code (DM 748 million). The Group profit for the year totalled DM 394.5 million, more than four times the amount in accordance with German statutory accounting requirements (DM 95.7 million).

Mr. Zeller explained that the considerable differences between the two sets of accounting provisions included three major elements:

  • The elimination of the contingency fund in the balance sheet and in the income statement;
  • changes of investment valuation and in investment income recognition;
  • other underwriting adjustments (including the deferral of acquisition costs and their subsequent depreciation).

By presenting the Group accounts on the basis of US GAAP, Mr. Zeller stressed that his company was seeking to take another step towards greater transparency. This is something which institutional investors and analysts particularly those in Anglo-American markets are increasingly demanding.

The Annual General Meeting was well-attended, attracting more than 700 participants; it approved all the items on the agenda by a large majority, including the conversion of the share capital to the euro currency and to no-par value shares. The company was also authorized to buy back up to 10 % of its shares.