Annual Report 2003 - Hannover Re

Management report
life and health reinsurance
The above table does not include the deferred
acquisition costs for the life reinsurance
portfolio of Hannover Reinsurance (Dublin) Ltd.,
the former HDI Reinsurance (Ireland) Ltd., which
has been part of the Hannover Re Group since
mid-2003.
With effect from the year under review, we
have enhanced our disclosure compared to the
previous year by recognising not only the deferred
acquisition costs but also the unearned
revenue reserve and contracts that do not have
the character of insurance under US GAAP as
defined by SFAS 113.
When evaluating the modest increase in the
non-capitalised portfolio value in the year under
review, it should be borne in mind that the significant
devaluation of key currencies had an impact
of around EUR 35 million on the non-capitalised
portfolio value. Had it not been for this
single effect the scale of the change would have
been in line with multi-year expectations. The
extraordinary increase in the previous year was
due not only to particularly low discount rates
but also to non-recurring special effects, such as
the rehabilitation of US health business. It cannot
therefore be expected on a regular basis.
Senior citizens' products
offer good market
prospects in Germany
Germany
In the German market, which is served by
the business center Hannover Life Re Germany
(E+S Rück), we stepped up our marketing activities
and expanded our range of services. The
written portfolio consists predominantly of financing
transactions, although the proportion
of risk-oriented covers has increased appreciably.
Several new customer accounts were acquired
– especially with large mutual insurers –
as numerous German life insurers restructured
their reinsurance programmes.
A further focus of our activities was on the
German senior citizens' market, which in our assessment
offers considerable promise for the
future.
Gross premium income contracted somewhat
year on year. The bulk of our premiums derives
from a number of high-volume financing
transactions concluded for unit-linked life and
annuity products. The underwriting experience in
all risk components was similar to that of the previous
year, thus producing a result slightly below
the previous year's level.
Rest of Europe
United Kingdom
This important market is served by two of
our business centers: as a locally licensed reinsurer
Hannover Life Re UK writes traditional life and
critical illness business, making systematic use of
Hannover Life Re Ireland as co-reinsurer. Over the
past ten years Hannover Life Re International
has accumulated specialist experience as a provider
of enhanced annuities, and it now handles
several sizeable programmes of this type in the
United Kingdom.
Against a backdrop of good results we
boosted gross premiums to EUR 561 million; of
this total volume, 41% was apportionable to
business written by Hannover Life Re UK, while
59% was generated by enhanced annuities. The
United Kingdom is thus our second-most important
market after the United States. Hannover
Life Re UK reported an operating profit (EBIT)
of EUR 6.6 million, an increase of 24.1%. The
performance of the annuity portfolio similarly
lived up to our expectations.
Ireland
Our Irish subsidiary Hannover Life Re Ireland
makes the most of the favourable business environment
in Dublin and writes treaty business
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