Hannover Re GWP rises

Hannover Re announced Q1 GWP grew 7.1% to €2.9bn (€2.7bn). The level of retained premium decreased to 90.8% (91.7%). Net premium earned climbed by 9.5% to €2.3bn (€2.1bn). The operating profit (EBIT) stood at €245.0m, down from €307.0m in Q1 2009.

Gross premium in non-life reinsurance increased by 4.0% to €1.7bn (€1.7bn). The level of retained premium retreated slightly to 90.1% (92.4%). Net premium earned climbed 6.5% to €1.3bn (€1.2bn).

Hannover Re said that adjusted for the positive non-recurring effect of €86.4m recognised in the first quarter of the previous year in connection with the acquisition of the ING life reinsurance portfolio, EBIT would have grown by 11.1%.

Q1 financial highlights €000s (2009 in brackets)

• Gross written premium 2,850.1 +7.1% (2,661.9)
• Net premium earned 2,289.6 +9.5% (2,091.3)
• Net underwriting result -49.1 (-1.7)
• Net investment income 279.5 +41.0% (198.2)
• Operating profit (EBIT) 245.0 -20.2% (307.0)
• Group net income (loss) 157.2 -31.2% (228.6)
• Policyholders' surplus2) 5,991.7 +6.6% (5,619.1)

Non-life reinsurance

• Gross written premium 1,721.9 +4.0% (1,656.0)
• Net premium earned 1,258.0 +6.5% (1,180.9)
• Net underwriting result 5.5 -89.8% (53.6)
• Operating profit (EBIT) 165.6 -11.7% (187.6)
• Group net income (loss) 109.4 -13.2% (126.1)
• Retention 90.1% 92.4%
• Combined ratio5) 99.3% 95.0%
• EBIT margin3) 13.2% 15.9%

Life and health reinsurance

• Gross written premium 1,128.1 +12.2% (1,005.9)
• Net premium earned 1,031.6 +13.3% (910.4)
• Operating profit (EBIT) 68.8 -42.0% (118.6)
• Group net income (loss) 52.0 -52.9% (110.5)
• Retention 91.8% 90.6%
• EBIT margin3) 6.7% 13.0%

Chief executive officer Ulrich Wallin said: "With our Group net income of €157.2m we are right on track to achieve our targeted total result.” The previous year's figure of €228.6m included a special effect of €86.4m.

"Although the burden of major losses in this quarter was higher than our expected level, the achieved result puts in place a good platform for attaining our 2010 profit target – namely a return on equity of at least 15 percent after tax",

The largest single loss for Hannover Re was the earthquake in Chile (€185.1m). The earthquake in Haiti produced loss expenditure in the order of €25.5m owing to lower insured values. Reserves of around €40m have been constituted for European winter storm "Xynthia".

Altogether, the net burden of major losses for the first quarter totalled €264.4m (€98.8m) – a figure well in excess of the expected level. The combined ratio of 99.3% (95.0%) was assisted by run-off profits from reserves constituted for prior years with respect to major losses and in German business.

The net underwriting result declined markedly from €53.6m in the Q1 2009 to €5.5m. The operating profit (EBIT) in non-life reinsurance fell by 11.7% to €165.6m (€187.6m). Group net income contracted by 13.2% to €109.4m (€126.1m), producing earnings per share of €0.91 (€1.05).

Life and health reinsurance

Gross written premium climbed 12.2% to €1.1bn (€1.0bn) as at 31 March 2010. The level of retained premium nudged slightly higher to 91.8% (90.6%). Net premium earned increased by 13.3% to €1.0bn (€910.4m), thereby surpassing the growth target of 10%.