Annual Report 2003 - Hannover Re

The Hannover Re share
Last but not least, our Investor Relations
webpages offer you regular updates on all our IR
activities, and interested readers can consult our
new "IR Online Magazine" for the latest monthly
insights into developments at Hannover Re, in the
reinsurance industry and on the capital markets.
In June 2003 Hannover Re decided to implement
a combined capital increase for cash
and a contribution in kind in order to strengthen
its capital resources. This measure increased our
equity base by EUR 530 million and enlarged our
underwriting capacity. Consequently, in the year
under review we were able to fully participate
in the hard, profitable reinsurance markets and
raise our level of retained premiums in this profitable
business.
Following our capital increase in June 2003
the number of Hannover Re shareholders grew
from more than 25,000 to around 28,000. The
placement of a 20.6% shareholding with institutional
investors through our parent company
Talanx AG in February 2004 boosted Hannover
Re's free float by a further 24.8 million shares
to its current level of 48.8% of the capital stock.
The proportion of the free float attributable to
institutional investors (corporate entities) increased
substantially to 84%. The number of
Hannover Re shareholders as at 27 February
2004 stood at 32,529. Both measures had an
extremely favourable effect on the liquidity of our
share. The average value of the shares traded
doubled after the capital increase to roughly
EUR 5 million and then tripled after the reduction
in the share held by Talanx to more than EUR
15 million per day.
In September Hannover Re was awarded
the title "Reinsurance Company of the Year
2003" by the highly reputed UK trade journal
"Reactions". The selection was made by the
magazine's readership, namely the employees
of insurance and reinsurance companies around
the world, insurance and reinsurance brokers as
well as financial analysts, rating agencies and
other service providers. Among the reasons for
awarding Hannover Re with the prize, "Reactions"
cited the consistently high return on equity gen-
erated by the company, the relative price stability
of its share and its expert capital management –
not least in view of the capital increase implemented
in June of the year under review.
As an additional measure, the issue of further
subordinated hybrid capital (a blend of equity
and debt capital) in February of the current financial
year enabled Hannover
Re to optimise its capital base.
With this transaction we made
the most of the attractive interest
rate environment and repurchased
the outstanding US
dollar bond at a very low exchange
rate.
Hannover Re has responded
to the growing importance
of the German Corporate Governance
Code by providing a
detailed Corporate Governance
section on its Investor Relations
Internet pages. All information
required pursuant to § 161 of the German Stock
Corporation Act is published there. In addition,
in the current financial year we are already fully
implementing the financial reporting deadlines
recommended by the Corporate Governance
Code: the consolidated annual
financial statements will be published
within 90 days of the end
of the financial year and the interim
reports within 45 days of
the end of the reporting period.
The German Corporate
Governance Code also provides
for variable remuneration of
management based on corporate
performance. We live up to
this standard with our virtual
stock option plan for the Group's managerial
staff worldwide, a scheme which we launched as
long ago as 2000.
Shareholding structure by countries
(as % of free float)
Luxembourg
3%
70 other countries
4%
Switzerland
6%
Belgium
7%
USA
11%
United Kingdom
12%
Shareholding structure by natural persons/
corporate entities (as % of free float)
Natural persons
16%
Germany
57%
Corporate
entities
84%
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