Annual Report 2003 - Hannover Re

Management report
risk report
Net loss reserve and its run-off
Figures in EUR million
1993
31.12.
1994
31.12.
1995
31.12.
1996
31.12.
1997
31.12.
1998
31.12.
1999
31.12.
2000
31.12.
2001
31.12.
2002
31.12.
2003
31.12.
Loss and loss adjustment
expense reserve (net) for the year
in question and previous years
plus payments made to date on
the original reserve
End of year 3 486.5 3 735.6 3 957.6 4 304.7 4 849.4 5 002.1 5 696.3 6 162.3 6 867.8 5 846.1 6 584.9
One year later 3 216.0 3 475.7 4 110.2 4 339.1 4 484.9 5 322.2 5 885.0 6 265.0 6 819.2 5 667.7
Two years later 3 041.0 3 403.5 4 060.9 4 005.9 4 590.9 5 217.8 5 482.1 6 017.5 5 795.6
Three years later 3 101.6 3 528.6 3 835.6 4 016.0 4 435.9 4 841.0 5 125.7 5 206.6
Four years later 3 211.7 3 356.2 3 811.4 3 883.9 4 153.7 4 630.3 4 427.8
Five years later 3 066.0 3 329.1 3 695.1 3 666.3 3 949.5 4 001.5
Six years later 3 049.4 3 268.3 3 547.6 3 489.2 3 362.4
Seven years later 2 990.8 3 177.8 3 417.5 3 003.0
Eight years later 2 939.3 3 059.5 3 220.5
Nine years later 2 830.3 2 922.4
Ten years later 2 733.4
Net run-off result of
the loss reserve 753.1 813.2 737.1 1 301.7 1 487.0 1 000.6 1 268.5 955.7 1 072.2 178.4
Of which currency exchange
rate differences 114.2 12.1 180.3 16.2 (303.7) (119.7) (495.4) (782.8) (1 062.5) (639.8)
Net run-off result excluding
currency exchange
rate differences 867.3 825.3 917.4 1 317.9 1 183.3 880.9 773.1 172.9 9.7 (461.4)
As percentage of
original loss reseve 24.9 22.1 23.2 30.6 24.4 17.6 13.6 2.8 0.1 (7.9)
The reserves in life and health reinsurance
are always based upon the information provided
by our clients. Actuarial analyses ensure that the
actuarial bases (interest rate, biometrics, costs)
used to determine the policy benefits for life and
health contracts are appropriate and that the
safety margins contained therein are adequately
calculated. Furthermore, local supervisory authorities
monitor the reserves calculated by ceding
companies to ensure that they satisfy all local
requirements with respect to actuarial methods
and assumptions (e.g. use of mortality and disability
tables, assumptions regarding the lapse
rate, etc.).
In order to assess the risk of losses exceeding
premiums in property and casualty reinsurance
we track, inter alia, the combined ratio over time.
This analysis is performed both inclusive and exclusive
of catastrophe losses.
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