Annual Report 2010 - Hannover Re

More documents

Recommendations

Info

5.12 Debt and subordinated capital In order to safeguard the sustained financial strength of the Hannover Re Group, Hannover Re has issued subordinated debt by way of a number of guaranteed, callable bonds. On 14 September 2010 Hannover Re placed a new subordinated bond on the European capital market through its subsidiary Hannover Finance (Luxembourg) S.A. This subordinated debt with a nominal value of EUR 500.0 million has a maturity of 30 years with a first scheduled call option after ten years. The bond carries a fixed coupon of 5.75% p.a. in the first ten years, after which the interest basis changes to a floating rate of three-month EURIBOR +423.5 basis points. On 1 June 2005 Hannover Re issued further subordinated debt in the amount of EUR 500.0 million through its subsidiary Hannover Finance (Luxembourg) S.A. The bond is perpetual and carries a fixed coupon of 5.00% in the first ten years. It may be redeemed by Hannover Re on 1 June 2015 at the earliest and at each coupon date thereafter. If the bond is not called at the end of the tenth year, the coupon will step up to a floating-rate yield of quarterly EURIBOR +268 basis points. The interest will be serviced according to the same principles as those practised in the past. As part of the transaction, holders of the subordinated debt of EUR 350.0 million placed by Hannover Re in 2001 – which has a term of 30 years and may be called in prior to maturity by the issuer on 14 March 2011 – were offered an opportunity to exchange their existing issue for holdings in the new bond. Participation in the exchange amounted to a nominal value of EUR 211.9 million, corres ponding to EUR 240.5 million of the new bond issue. The cash component of the new bond in the amount of nominally EUR 259.5 million was placed predominantly with institutional investors in Europe. The remaining volume of the bond issued in 2001 after the exchange was unchanged at EUR 138.1 million and carries a fixed coupon of 6.25% until March 2011. If Hannover Re does not exercise its right of early cancellation on this date, the coupon will step up to a floating-rate yield of quarterly EURIBOR +205 basis points. On 26 February 2004 subordinated debt in the amount of EUR 750.0 million was placed through Hannover Finance (Luxembourg) S.A. on the European capital markets. The bond has a final maturity of 20 years and for the first ten years carries a fixed coupon of 5.75% (calculated as a spread of 163 basis points over the 10-year mid-swap rate at the time of issue). It may be redeemed by Hannover Re on 26 February 2014 at the earliest and at each coupon date thereafter. If the bond is not called at the end of the tenth year, the coupon will step up to a floating-rate yield of quarterly EURIBOR +263 basis points. Altogether four subordinated bonds were recognised as at the balance sheet date with a cost or amortised cost of EUR 1,869.1 million (EUR 1,365.1 million). 162 Notes 5.12 Debt and subordinated capital Hannover Re Group annual report 2010
Debt and subordinated capital in EUR thousand 2010 Subordinated loans Coupon Maturity Currency Amortised cost Accrued interest and rent Fair value Hannover Finance (Luxembourg) S.A., 2010 5.75 2040 EUR 500,000 (34,750) 8,507 473,757 Hannover Finance (Luxembourg) S.A., 2005 5.00 n/a EUR 484,132 (44,527) 14,589 454,194 Hannover Finance (Luxembourg) S.A., 2004 5.75 2024 EUR 746,912 9,276 36,390 792,578 Hannover Finance (Luxembourg) S.A., 2001 6.25 2031 EUR 138,063 (1,549) 6,908 143,422 1,869,107 (71,550) 66,394 1,863,951 Debt 187,624 – 841 188,465 Other long-term liabilities 66 – – 66 Total 2,056,797 (71,550) 67,235 2,052,482 Debt and subordinated capital in EUR thousand 2009 Subordinated loans Fair value measurement Coupon Maturity Currency Amortised cost Fair value measurement Accrued interest and rent Fair value Hannover Finance (Luxembourg) S.A., 2005 5.00 n/a EUR 481,091 (71,794) 14,589 423,886 Hannover Finance (Luxembourg) S.A., 2004 5.75 2024 EUR 746,091 (27,599) 36,409 754,901 Hannover Finance (Luxembourg) S.A., 2001 6.25 2031 EUR 137,868 (7,775) 6,907 137,000 1,365,050 (107,168) 57,905 1,315,787 Debt 116,200 – 59 116,259 Other long-term liabilities 86 – – 86 Total 1,481,336 (107,168) 57,964 1,432,132 The aggregated fair value of the extended subordinated loans is based on quoted, active market prices. If such price information was not available, fair value was determined on the basis of the recognised effective interest rate method or estimated using other financial assets with similar rating, duration and return characteristics. Under the effective interest rate method the current market interest rate levels in the relevant fixed-interest-rate periods are always taken as a basis. The further rise of EUR 71.4 million in the debt to EUR 187.6 million was driven by increased borrowing requirements as a consequence of the extended investment activities of Hannover Re Real Estate Holdings, Inc. The largest debt in an amount equivalent to nominally EUR 68.4 million matures on 26 March 2015 and was accessed by the company in two tranches as at 1 April 2010 and 2 November 2010. Notes Hannover Re Group annual report 2010 5.12 Debt and subordinated capital Notes 163
Page 1 and 2:
Annual Report 2010
Page 3 and 4:
The Hannover Re Group America Europ
Page 5 and 6:
Contents For our investors 2 - 15 L
Page 7 and 8:
Our operational business was impact
Page 9 and 10:
Our life and health reinsurance bus
Page 11 and 12:
years will generate increasing inco
Page 13 and 14:
For our investors Seated from left
Page 15 and 16:
The market capitalisation of the Ha
Page 17 and 18:
Basic information Securities identi
Page 19 and 20:
Strategic objectives 1. Profitable
Page 21 and 22:
Macroeconomic climate The global ec
Page 23 and 24:
Business development We are thoroug
Page 25 and 26:
Non-life reinsurance Accounting for
Page 27 and 28:
Along with the aforementioned natur
Page 29 and 30:
The establishment of the Federal In
Page 31 and 32:
The Die beste volatility Volatilit
Page 33 and 34:
Credit and surety Breakdown of gros
Page 35 and 36:
Thanks not least to a new branch of
Page 37 and 38:
The insurance sector continues to b
Page 39 and 40:
have enlarged our portfolio. In the
Page 41 and 42:
anch in Shanghai concentrates on bu
Page 43 and 44:
Ageing macht creates Märkte market
Page 45 and 46:
Key figures for life and health rei
Page 47 and 48:
new business. Against this backdrop
Page 49 and 50:
The rating agency Standard & Poor
Page 51 and 52:
Rating of fixed-income securities
Page 53 and 54:
In 2009 Hannover Re launched anothe
Page 55 and 56:
Solvency For our company II heißt
Page 57 and 58:
Social commitment Hannover Re’s c
Page 59 and 60:
Opportunity and risk report Overrid
Page 61 and 62:
Available capital and required risk
Page 63 and 64:
Internal risk management and contro
Page 65 and 66:
The table below lists the catastrop
Page 67 and 68:
Sensitivity analysis of the Market
Page 69 and 70:
events. Further significant risk ma
Page 71 and 72:
Gross written premium retained in %
Page 73 and 74:
Strategic risks derive from the ris
Page 75 and 76:
Performance Excellence Check The PE
Page 77 and 78:
Financial position Asset / liabilit
Page 79 and 80:
Financing and Group debt In additio
Page 81 and 82:
Financial strength ratings of subsi
Page 83 and 84:
Naturkatastrophen Natural catastrop
Page 85 and 86:
Corporate Governance The principles
Page 87 and 88:
for orderly performance of their ta
Page 89 and 90:
in question. With the aim of making
Page 91 and 92:
The Annual General Meeting of Hanno
Page 93 and 94:
Measurement bases/conditions of pay
Page 95 and 96:
Individual remuneration received by
Page 97 and 98:
motivation, customer satisfaction,
Page 99 and 100:
eversal. Nevertheless, we anticipat
Page 101 and 102:
of demand and the diversification o
Page 103 and 104:
Profit and growth targets for 2011
Page 105 and 106:
as at 31 December 2010 Liabilities
Page 107 and 108:
Consolidated statement of comprehen
Page 109 and 110:
Consolidated cash flow statement 20
Page 111 and 112:
Figures in EUR thousand 1.1.- 31. 1
Page 113 and 114:
as at 31 December 2010 Life/health
Page 115 and 116: as at 31 December 2010 Life/health
Page 117 and 118: 1. Company information The parent c
Page 119 and 120: Standards Applicable to financial y
Page 121 and 122: Impairments: as at each balance she
Page 123 and 124: asis of a five-year detailed plan a
Page 125 and 126: come. Currency translation differen
Page 127 and 128: The projections, which cover variou
Page 129 and 130: The following list of shareholdings
Page 131 and 132: Name and registered office of the c
Page 133 and 134: Name and registered office of the c
Page 135 and 136: Investments Within the scope of its
Page 137 and 138: 5. Notes on the individual items of
Page 139 and 140: The stated maturities may in indivi
Page 141 and 142: Amortised cost, unrealised gains an
Page 143 and 144: Carrying amounts before impairment
Page 145 and 146: Breakdown of investments by currenc
Page 147 and 148: In addition, we held indirect real
Page 149 and 150: Development of level 3 financial in
Page 151 and 152: Development of deferred acquisition
Page 153 and 154: This item principally consists of t
Page 155 and 156: Technical provisions in EUR thousan
Page 157 and 158: Net loss reserve and its run-off in
Page 159 and 160: Liabilities in liability and motor
Page 161 and 162: From 1997 onwards it has been possi
Page 163 and 164: The recognised provision for pensio
Page 165: in EUR thousand Other reclassificat
Page 169 and 170: Furthermore, a long-term unsecured
Page 171 and 172: 6.2 Investment income Investment in
Page 173 and 174: 6.3 Reinsurance result Reinsurance
Page 175 and 176: Tax-relevant bookings on the Group
Page 177 and 178: The following table presents a reco
Page 179 and 180: Maturity structure of derivative fi
Page 181 and 182: Business assumed and ceded in Germa
Page 183 and 184: last twenty trading days prior to t
Page 185 and 186: On this basis the aggregate provisi
Page 187 and 188: 7.7 Contingent liabilities and comm
Page 189 and 190: 7.11 Events after the balance sheet
Page 191 and 192: Responsibility statement To the bes
Page 193 and 194: ated by a reinsurance subsidiary do
Page 195 and 196: - in each case drawn up as at 31 De
Page 197 and 198: Branch offices and subsidiaries of
Page 199 and 200: Spain United Kingdom USA HR Hannove
Page 201 and 202: Corporate Governance: serves to ens
Page 203 and 204: Life and health (re-)insurance: col
Page 205 and 206: Segmental reporting: presentation o
Page 207 and 208: Financial calendar 2011/2012 9 Marc
Page 209 and 210: Contact information Corporate Commu
show all

Annual Report 2010 - Hannover Re

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?