Annual Report 2010 - Hannover Re

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the Market Consistent Embedded Value (MCEV) for life reinsurance business, the importance of the Chinese market for Hannover Re going forward as well as – along with an update on the level of our reserves – the handling of retrocessions within the Hannover Re Group. The shareholding structure of Hannover Re was stable in the year under review. The interest held by Talanx AG remained unchanged, while the stake held by private investors grew by 0.3% to 7.8%, causing the proportion in the hands of institutional investors to contract slightly to 42.0%. Shareholding structure 7.8% Private investors 42.0% Institutional investors 50.2% Talanx AG Analyst research All in all, 38 analysts handed down more than 220 recommendations for Hannover Re in 2010. The extent of our analyst coverage remained very stable overall, although fluctuation among the analysts was comparatively high. We were pleased to note that the cessation of research activities as a consequence of takeovers was offset by the fact that four new analysts began to follow us. The analysts’ average target price developed favourably in the course of the year, climbing incrementally from EUR 36.71 at the start of the year to EUR 41.43 by year-end. The average analysts’ opinion tended to move sideways during the year, declining only in the fourth quarter in the context of the rise in price of the Hannover Re share. Based on the data for the first nine months of 2010, 33 analysts published their opinion at year-end: twelve analysts recommended the Hannover Re share as “buy” or “overweight”; altogether fifteen opinions were a “hold”, making this the most common, while only six “underweight” or “sell” recommendations were handed down. Average analysts’ price target for the Hannover Re share in EUR 44 Turning to the breakdown of our free float by countries, the proportionate holding attributable to Germany increased sharply in the year under review by 4.1% to 40.6%, while the US share contracted. The relative holdings attributable to other countries changed only marginally in comparison with the end of the previous year. 42 40 38 36 34 Shareholding structure by countries 3.0% Other 2.7% France 3.4% Switzerland 3.5% Luxembourg 4.4% Belgium 19.9% United Kingdom (free float) 40.6% Germany 31/12/09 25/03/10 17/06/10 09/09/10 30/12/10 Source: Bloomberg Average analysts’ opinions of the Hannover Re share (3-month consensus) Buy Overweight 22.5% USA Hold Underweight Sell 31/12/09 01/04/10 01/07/10 30/09/10 30/12/10 Source: Bloomberg 12 The Hannover Re share Hannover Re Group annual report 2010
Basic information Securities identification number: 840221 International Securities Identification Number (ISIN): DE 000 840 221 5 Bloomberg ticker symbol: HNR1 Thomson Reuters ticker symbol: HNRGn Market segment: Prime Standard Index inclusion: MDAX First listed: 30 November 1994 Number of issued shares (as at 31 December 2010): 120,597,134 Common shares (as at 31 December 2010): EUR 120,597,134.00 Share class: No-par-value registered shares Exchange listings: Xetra, Frankfurt, Munich, Stuttgart, Hamburg, Berlin, Düsseldorf, Hannover (official trading: Xetra, Frankfurt and Hannover) For our investors USA: American Depositary Receipts (Level 1 ADR program; 2 ADR = 1 share) Key figures in EUR 2010 2009 1 2008 2007 2006 Number of shares in million 120.6 120.6 120.6 120.6 120.6 Annual low 2 30.61 20.64 15.70 30.30 25.85 Annual high 2 41.38 34.65 35.79 37.50 35.14 Year-opening price 2 32.71 22.50 31.55 35.08 29.93 Year-ending price 2 40.14 32.71 22.50 31.55 35.08 Market capitalisation at year-end in EUR million 4,840.8 3,944.7 2,713.4 3,804.8 4,230.5 Shareholders' equity in EUR million 4,509.0 3,714.4 2,830.1 3,349.1 2,897.8 Book value per share 37.39 30.80 23.47 27.77 24.03 Earnings per share (basic and diluted) 6.21 6.08 (1.05) 5.98 4.27 Dividend per share 2.30 3 2.10 – 2.30 4 1.60 Cash flow per share 13.94 14.53 12.10 7.56 13.77 Return on equity (after tax) 5 18.2% 22.4% –4.1% 23.1% 18.7% Dividend yield (after tax) 6 5.7% 6.4% – 7.3% 4.6% Price-to-book (P/B) ratio 7 1.1 1.1 1.0 1.1 1.5 Price-to-earnings (P/E) ratio 8 6.5 5.4 – 5.3 8.2 Price-to-cash flow (P/CF) ratio 9 2.9 2.3 1.9 4.2 2.5 1 Adjusted to IAS 8 2 XETRA daily closing prices 3 Dividend proposal 4 1.80 EUR + 0.50 EUR bonus 5 Earnings per share/average of book value per share at start and end of year 6 Dividend per share/year-end closing price 7 Year-end closing price/book value per share 8 Year-end closing price/earnings per share 9 Year-end closing price/cash flow (from operating activities) per share Hannover Re Group annual report 2010 The Hannover Re share 13
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: The market capitalisation of the Ha
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
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Performance Excellence Check The PE
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Financial position Asset / liabilit
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Financing and Group debt In additio
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Financial strength ratings of subsi
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Naturkatastrophen Natural catastrop
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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
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The Annual General Meeting of Hanno
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Measurement bases/conditions of pay
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Individual remuneration received by
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motivation, customer satisfaction,
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eversal. Nevertheless, we anticipat
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of demand and the diversification o
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Profit and growth targets for 2011
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as at 31 December 2010 Liabilities
Page 107 and 108:
Consolidated statement of comprehen
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Consolidated cash flow statement 20
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Figures in EUR thousand 1.1.- 31. 1
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as at 31 December 2010 Life/health
Page 115 and 116:
as at 31 December 2010 Life/health
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1. Company information The parent c
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Standards Applicable to financial y
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Impairments: as at each balance she
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asis of a five-year detailed plan a
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come. Currency translation differen
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The projections, which cover variou
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The following list of shareholdings
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Name and registered office of the c
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Name and registered office of the c
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Investments Within the scope of its
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5. Notes on the individual items of
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The stated maturities may in indivi
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Amortised cost, unrealised gains an
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Carrying amounts before impairment
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Breakdown of investments by currenc
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In addition, we held indirect real
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Development of level 3 financial in
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Development of deferred acquisition
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This item principally consists of t
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Technical provisions in EUR thousan
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Net loss reserve and its run-off in
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Liabilities in liability and motor
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From 1997 onwards it has been possi
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The recognised provision for pensio
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in EUR thousand Other reclassificat
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Debt and subordinated capital in EU
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Furthermore, a long-term unsecured
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6.2 Investment income Investment in
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6.3 Reinsurance result Reinsurance
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Tax-relevant bookings on the Group
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The following table presents a reco
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Maturity structure of derivative fi
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Business assumed and ceded in Germa
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last twenty trading days prior to t
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On this basis the aggregate provisi
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7.7 Contingent liabilities and comm
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7.11 Events after the balance sheet
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Responsibility statement To the bes
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ated by a reinsurance subsidiary do
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- in each case drawn up as at 31 De
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Branch offices and subsidiaries of
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Spain United Kingdom USA HR Hannove
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Corporate Governance: serves to ens
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Life and health (re-)insurance: col
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Segmental reporting: presentation o
Page 207 and 208:
Financial calendar 2011/2012 9 Marc
Page 209 and 210:
Contact information Corporate Commu
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Annual Report 2010 - Hannover Re

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