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Press Release on Interim Report 1/2001

Annual General Meeting of Hannover Re:

  • All items on the agenda approved by a large majority
  • First quarterly report submitted
  • Annual targets confirmed

Hannover, 20 July 2001:

At the Annual General Meeting of Hannover Re held today in Hannover, Wilhelm Zeller, Chairman of the Executive Board, not only looked forward to the prospects for 2001 but also presented the Hannover Re Group's first quarterly report. All the strategic segments generated profit contributions despite falling net investment income. The Annual General Meeting approved all the items on the agenda by a large majority, including the renewal of the Executive Board's authorisation to acquire own stock.

Attracting roughly 1,000 participants, the well-attended Annual General Meeting approved all the items on the agenda by a large majority. A dividend of EUR 2.30 plus a bonus of EUR 0.25 is to be paid on each share that was fully paid up for the entire financial year. Taking into account the corporation-tax credit, the gross dividend amounts to EUR 3.64. Mr. Zeller noted that this represented an increase of 25% on the previous year. The Annual General Meeting further resolved to authorise the Executive Board until 31 December 2002 to acquire own stock of up to 10% of the existing capital stock.

By presenting its first quarterly report, Hannover Re is complying with Deutsche Börse AG's requirement to report quarterly on the course of business. In this context, however, Mr. Zeller stated it is important to bear in mind that quarterly reports compiled by reinsurance companies are only of modest informational value. In the life and health reinsurance and financial reinsurance segments, in particular, there is no equal distribution of business throughout the year. What is more, in most markets reinsurers do not receive concrete notification of claims reserves until year-end. It is for these reasons that quarterly reports must contain extensive guesswork. Therefore, the information content of this quarterly report is limited. It can scarcely be taken as an indicator of the overall result for the year.

Since this is the first time that Hannover Re has published a quarterly report, comparative figures for the first quarter 2000 cannot be provided. As has already been explained above, it would not be meaningful to divide the previous year's figures by four.

Mr. Zeller was generally satisfied with the business development in the first quarter. The premium volume for all four strategic segments totalled EUR 2.4 billion.

Hannover Re made the most of the improved conditions in certain key property and casualty reinsurance markets to substantially expand its portfolio strongly. Despite a not inconsiderable increase in major claims and natural catastrophe losses, the combined ratio improved to 105.6% (previous year: 108.4%).

In life and health reinsurance, premium growth and result developed according to plan; the relatively weak profit contribution gives no indication of the expected result for the year.

Program business also performed well and lived up to growth expectations. The combined ratio improved from 102.5% to 96.6%. Following the unsatisfactory result of the previous year, there are thus clear signs of the anticipated increase in profitability.

Demand is rising steadily in financial reinsurance, and the volume of business in this segment consequently surpassed expectations. In this segment in particular, the result of the first quarter provides no indication of the year-end result, according to Mr. Zeller.

Net investment income fell markedly to EUR 204.9 million. Ordinary income was higher, but realised gains on investments declined; this decrease was due in part to the generally unsatisfactory development of the capital markets, although it also reflects the alternative courses of action arising out of the revised general tax framework (deferment of the realisation of profits to next year, from which point they shall be tax-free).

On balance, the pre-tax result before minority interests totalled EUR 63.1 million and the after-tax result came to EUR 41.3 million. Earnings per share thus amounted to EUR 1.40.

Looking at the profit situation for the whole of 2001, Mr. Zeller remains confident that the forecast targets can be achieved, provided no extraordinary incidence of major losses, negative developments on the capital markets or other unforeseen events occur.