Being successful in the current market environment
Transcrição
Being successful in the current market environment
Being successful in the current market environment Roland Vogel CFO UBS - 13th Annual Global Financial Services Conference New York, 10 May 2011 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Disclaimer This presentation does not address the investment objectives or financial situation of any particular person or legal entity. Investors should seek independent professional advice and perform their own analysis regarding the appropriateness of investing in any of our securities. While Hannover Re has endeavoured to include in this presentation information it believes to be reliable, complete and up-to-date, the company does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such information. Some of the statements in this presentation may be forward-looking statements or statements of future expectations based on currently available information. Such statements naturally are subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. This presentation serves information purposes only and does not constitute or form part of an offer or solicitation to acquire, subscribe to or dispose of, any of the securities of Hannover Re. © Hannover Rückversicherung AG. All rights reserved. Hannover Re is the registered service mark of Hannover Rückversicherung AG. Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | We are among the top 3 reinsurers in the world Premium ranking 2009 in m. USD Rank Group 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Munich Re Swiss Re Hannover Re Lloyd's Berkshire Hathaway Re SCOR RGA Re Transatlantic Everest Re Partner Re China Re Korean Re London Re Mapfre XL Capital Source: A.M. Best (September 2010) 1 Country D CH D GB USA F USA USA BDA BDA CHN ROK CDN E BDA GWP NPW 34,333 27,647 14,728 12,723 12,048 9,143 6,244 4,204 4,129 3,993 3,803 3,750 3,687 2,943 2,435 32,462 22,892 13,341 9,732 11,399 8,314 5,725 3,986 3,929 3,942 3,719 2,554 3,533 2,006 2,003 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Hannover Re consistently among most profitable reinsurers Even on after-tax basis, in spite of strong Bermuda competition 2006 2007 Rank RoE 2008 Rank RoE 2009 Rank RoE 2010 Company RoE Odyssey Re 28.3% 1 25.8% 1 20.5% 1 12.1% 6 9.2% 8 19.2% 1 Renaissance Re 27.5% 2 16.9% 4 (0.4%) 7 24.4% 2 18.1% 2 17.3% 2 Hannover Re 18.7% 4 23.1% 2 (4.1%) 9 22.4% 3 18.2% 1 15.7% 3 Partner Re 21.8% 3 17.7% 3 1.1% 5 25.9% 1 11.5% 3 15.6% 4 Everest Re 18.2% 6 15.6% 5 (0.4%) 6 14.6% 4 9.9% 6 11.6% 5 Munich Re 13.5% 9 14.9% 7 6.5% 3 11.8% 7 10.7% 4 11.5% 6 Transatlantic Re 15.6% 8 15.4% 6 3.1% 4 13.2% 5 9.7% 7 11.4% 7 SCOR 12.7% 10 13.8% 8 8.9% 2 10.2% 8 10.1% 5 11.1% 8 Swiss Re 16.5% 7 13.3% 9 (3.3%) 8 2.3% 10 3.6% 10 6.5% 9 XL Re1) 18.5% 5 3.6% 10 (31.8%) 10 2.7% 9 5.8% 9 (0.2%) 10 Ranking among shown peer group, based on company data, own calculation 1) Based on XL Capital group figures We aim to be one of the top 3 R/I in terms of RoE 2 Rank RoE 2006 - 2010 Rank avg. RoE Rank Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Strong topline growth and all-time high in earnings Driven by solid technical and investment income and positive tax one-off Favourable reinsurance markets High catastrophe frequency Strong growth in non-life reinsurance +10.3%, supported by sound pricing Growth within expectations in life and health +12.4%, most notably from enhanced annuities and emerging markets Result 2010 GWP: +11.2% NPE: +7.9% Net income: Increase of net investment income by 12.4% Large losses at EUR 662 m. well above budget (EUR 500 m.) EPS: 6.21 EUR RoE: 18.2% Equity: Stable capital markets 3 One-offs 2010: Sale of Clarendon (EUR -69 m.) and tax effect from BFH decision (EUR +112 m.) EUR 749 m. +21.4% Proposed dividend increase to: 2.30 EUR Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Record net income despite high burden of major losses in 2010 Net (major) losses* vs. net income in m. EUR 1,070 750 749 734 722 665 662 600 514 458 450 365 355 300 225 377 285 280 267 240 164 150 107 60 49 11 (127) 0 -150 2000 Net loss 2001 2002 2003 2004 2005 2006 2007 2008 Group net income * Claims over EUR 5 m. gross 4 Being successful in the current market environment 2009 2010 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Natural catastrophes set the tone of Q1/2011 But net income still positive Very high catastrophe burden Strong growth in non-life reinsurance +11.8% Result 1Q/2011 Growth within expectations in life and health +8.1% GWP: +10.3% NPE: +8.8% Stable capital markets Favourable life reinsurance markets 5 Strong increase of net investment income by 40.5%, helped by inflation swaps Net major losses of EUR 572 m., EUR 452 m. above Q1 budget (EUR 120 m.) Extraordinary reserve run-offs in the region of EUR 150 m. EUR +113.5 m. tax refund from Federal Fiscal Court Net income: EPS: RoE (annualised): Equity: BPS: EUR 52 m. 0.43 EUR 4.7% -3.6% EUR 36.05 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Our 5 major success drivers Diversification Opportunistic and cycle management Somewhat different in life/health reinsurance Innovation Low administrative expense ratio 6 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Life and health reinsurance continuous growth Gross written premium in m. EUR 11,429 10.000 EBIT 1.200 1,174 1.000 25% 9,317 8,320 26% 8.000 45% 25% 800 6.000 600 75% 4.000 3,067 2,135 6% 2.000 75% 74% 55% 400 11% 89% 200 94% 0 0 1990 Non-life reinsurance 1995 2000 2005 2010 Life and health reinsurance Reduction of group volatility due to improved diversification 7 2010 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Well diversified reinsurer Life and health and non-life reinsurance on a same capital basis reduce volatility and ensure more consistent profitability We have a wide diversification by line of business and territory within the groups • Non-life R/I 3 divisions 10 business centres • Life and health R/I 5 pillars 9 regions We have reduced our property-catastrophe exposure compared to the financial capacity and profitability We have broadened our customer base in North America at unchanged volume and exposure 8 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Well balanced international portfolio GWP 2010 EUR 11,429 Australia 4% Africa 4% Latin America 6% North America 30% Asia 8% Germany 10% Other European countries 16% 9 Great Britain 21% Here you may add the title of the presentation Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Diversification reduces capital requirements by a third Risk capital for the 99.97% VaR (according to internal risk model) in m. EUR 8,382 407 8.000 7,714 34% diversification 2,440 7.000 6.000 1,962 5.000 2,905 3.000 5,096 2.000 Effective capital requirement* 4.000 1.000 0 Non-life reinsurance Life and health reinsurance Assets Credit The risk categories have been adapted to the Solvency II requirements Calculation according to economic valuation principles As at December 2010 * Excluding operational risks 10 HR Group required capital HR Group available economic capital Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Hannover Re is well positioned. . . . . .to compete in the prevailing non-life market conditions Majority of business written via brokers Flexibility to exercise cycle management Centralised underwriting safeguards underwriting discipline Our U/W tools & margin requirements are based on the CoC allocated Selection of business that achieves our profitability targets We have a strong rating Offers a broad cross-section of available business Risk-based solvency regimes such as Solvency II will support the development towards rational buying and writing of reinsurance Growth in developed markets by seizing market opportunities 11 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Well diversified and grown in selective areas Non-life reinsurance GWP Split 2010: EUR 6,339 m. Global cat. XL 5% North America North America 13% Global facultative 11% Global treaty 19% Global R/I Marine 4% Aviation 6% Target markets UK, London market & direct 8% in m. EUR -18 Germany Structured R/I Specialty lines 12 GWP Growth (+10.3%) Credit, surety & pol. risk Germany 15% Structured R/I 10% Credit, surety & political risks 9% UK, London market & direct -2.2% 34 +3.9% -96 -13.0% 97 +20.7% 77 +17.9% Aviation 48 +14.3% Marine 12 +4.4% Global treaty 229 Global facultative Global cat XL 207 2 +23.2% +42.6% +0.9% Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | New markets' share driven by demand for longevity solutions Life and health reinsurance 5 strategic pillars GWP 2010: EUR 5,090 m. Financial Solutions 8% Conventional R/I 43% Growth GWP (+12.4%) Financial Solutions in m. EUR +10.0% 39 New markets 285 New Markets 28% Bancassurance +14.0% 65 Bancassurance 11% Multinationals 10% -4.9% Multinationals -26 Conventional R/I 13 +24.7% 173 +10.0% Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Hannover Re's positioning in life and health reinsurance Decentralised structure in order to support our direct marketing and underwriting without utilising intermediaries or brokers Intensive partnership with our clients looking for win-win situations rather than zero sum games Developing of attractive new products together with our cedents allow to provide value adding propositions Positioning in emerging markets enables us to benefit from the underlying growth We do consider acquisitions • But only if strategic fit/complement • No strategic prices Growth in developed & emerging markets due to new products and a continued increase of population 14 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | From a "nobody" to a "Major League player" Looking back over the last 20 years Gross written premium in m. EUR 5,090 5.000 4,529 4.000 3,083 3,134 2007 2008 2,794 3.000 2,472 2.000 1,403 1.000 142 0 1) 1) 1991 1998 2002 Growth 1) German-GAAP basis 2) 3) 2006 Consolidation 2) US-GAAP basis 3) Since 2006 IFRS basis Growth 4) Compound annual growth rate With a CAGR4) of ~21%, Hannover Re has become one of the leading global life and health players 15 2009 2010 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Hannover Re's life and health growth drivers Our worldwide presence and expertise is in demand Pioneer for generation 60+ products e. g. enhanced annuities, accident insurances, long-term care & health insurance New customer group: protection of longevity risks of European pension funds via longevity swaps Significant improvement in the US term market in connection with the purchase of a US life reinsurance portfolio Expansion of infrastructure in the growth markets Brazil, China, India and South Korea Investments in the Islamic insurance market (Takaful) and microinsurance Hannover Re has several growth potentials 16 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Hannover Re: an innovative reinsurer New products/markets Equity substitutes Enhanced annuities Energy savings Retakaful We pioneered securitisations • For risk-management purposes • ILS The expertise and experience of our underwriters has allowed us to develop leading positions in a variety of specialty markets Our superior market positioning and local knowledge allow us to grow in emerging markets 17 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Enhanced annuities: an innovative market Net premium earned in m. EUR 646 600 500 408 400 277 300 208 200 150 100 63 0 2005 18 2006 2007 2008 2009 2010 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Hannover Re remains the absolute cost leader Our overhead ratio is less than half of the industry average Administrative-expense ratio1) 7.5% 0 0 0 0 3.6% 3.2% 3.1% 2006 2007 2008 3.2% 3.2% 0 0 Own calculation 1) Administrative expenses – other technical expenses (in % of net premium earned) 2) Munich Re, SCOR, Swiss Re, Transatlantic Re, Partner Re, Everest Re 19 2009 2010 Peer average2) 2010 Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Lowest administrative expense ratio within our peer group* How? Why? To be competitive To have a better choice of business To have better access to niches To be profitable Lean, efficient infrastructure with no underwriting authority in USA High exposure to broker biz to be able to execute strict cycle mgmt No unbundled services Lead positions only in carefully selected areas No attempt to offer everything to everyone, but rather concentrate on market segments in which we have a particular expertise * Munich Re, SCOR, Swiss Re, Transatlantic Re, Partner Re, Everest Re 20 Outlook Group 2010 | Group Q1/2011 | Diversification | Opportunistic and cycle mgmt. | Life and health R/I | Innovation | Admin. expense ratio | Outlook | Updated guidance for 2011 After Q1/2011 results reduced from EUR 650 m. to EUR 500 m. Hannover Re Group • Gross written premium (GWP)1) ……………………………………~ +7% - +8% • Net premium earned (NPE)1) ……………………………………… ~ +7% - +8% Non-life reinsurance (NPE)1) …………………………………………………. ~ +5% Life and health reinsurance (NPE)1) ………………………………. ~ +10% - +12% Return on investment2)3) ……………………………….........….................... ~ 3.5% Net income2) …………………………………………………………… ~ EUR 500 m. Dividend pay-out ratio4) …………………………………………….......... 35% - 40% 1) At unchanged f/x rates 2) Subject to no major distortions in capital markets and/or large losses in Q2-Q4/2011 not exceeding EUR 410 m. 3) Excluding effects from inflation swaps 4) Related to group net income according to IFRS 21