Annual Report 2010 - Hannover Re

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We would refer the reader to the explanatory remarks in Section 4 “Consolidation” regarding the securitisation of reinsurance risks. All in all, application of the standards governing the carrying of derivatives in connection with the technical account led to recognition of assets totalling EUR 54.5 million (EUR 58.0 million) as well as recognition of liabilities from the derivatives resulting from technical items in an amount of EUR 8.5 million (EUR 3.3 million) as at the balance sheet date. Increases in investment income amounting to EUR 11.0 million (EUR 122.1 million) as well as charges to income of EUR 22.2 million (EUR 20.0 million) were recognised in the year under review from all separately measured derivatives in connection with the technical account. 7.2 Related party disclosures IAS 24 “Related Party Disclosures” defines related parties as group entities of a common parent, associated entities, legal entities under the influence of key management personnel and the key management personnel of the entity itself. Transactions between Hannover Re and its subsidiaries, which are to be regarded as related parties, were eliminated through consolidation and are therefore not discussed in the notes to the consolidated financial statement. In the year under review the following significant business relations existed with related parties. HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI) holds an unchanged majority interest of 50.22% in Hannover Re through Talanx AG. With effect from the 1997 financial year onwards all new business and renewals written on the German market have been the responsibility of E+S Rück, while Hannover Re has handled foreign markets. Internal retrocession arrangements ensure that the percentage breakdown of the business applicable to the previously existing underwriting partnership is largely preserved between these companies. Within the contractually agreed framework AmpegaGerling Asset Management GmbH performs investment and asset management services for Hannover Re and some of its subsidiaries. AmpegaGerling Immobilien Management GmbH performs services for Hannover Re under a management contract. Companies belonging to the Talanx Group granted the Hannover Re Group insurance protection inter alia in the areas of public liability, building, group accident and business travel collision insurance. In addition, Talanx AG billed Hannover Re and E+S Rück pro rata for the directors’ and officers’ (D&O) insurance of the Talanx Group. Divisions of Talanx AG also performed services for us in the areas of taxes and general administration, in the latter case additionally through Talanx Service AG (formerly HDI-Gerling Sach Serviceholding AG). Furthermore, a cost allocation agreement existed with Talanx AG for joint promotional activities in 2010. The Hannover Re Group provides reinsurance protection for the HDI Group. To this extent, numerous underwriting business relations exist with related parties in Germany and abroad which are not included in Hannover Re’s consolidation. This includes business both assumed and ceded at usual market conditions. Protection Reinsurance Intermediaries AG grants Hannover Re and E+S Rück a preferential position as reinsurers of cedants within the Talanx Group. In addition, Hannover Re and E+S Rück are able to participate in the protection covers on the retention of Group cedants and share in the protection afforded by them. In certain circumstances Hannover Re and E+S Rück are obliged to assume unplaced shares of the reinsurance of Group cedants from Protection Reinsurance Intermediaries AG. 176 Notes 7.2 Related party disclosures Hannover Re Group annual report 2010
Business assumed and ceded in Germany and abroad in EUR thousand 31. 12. 2010 Premium Underwriting result Business assumed Non-life reinsurance 381,281 107,621 Life and health reinsurance 276,418 (6,502) 657,699 101,119 Business ceded Non-life reinsurance (19,215) (21,903) Life and health reinsurance (8,789) (4,038) (28,004) (25,941) Total 629,695 75,178 The reinsurance relationships with related parties in the year under review are shown with their total amounts in the table. Positive run-offs of reserves and losses in proportional reinsurance business from the German market significantly influenced the underwriting result from business assumed from related parties in the non-life reinsurance segment. With effect from the second quarter of 2010 Hannover Reinsurance (Ireland) Ltd. and Talanx AG commuted a group of reinsurance treaties furnished with guarantees from Talanx AG. The guarantees were transferred to Hannover Reinsurance (Ireland) Ltd in 2007. All claims of Hannover Reinsurance (Ireland) Ltd. under the guarantees expired upon commutation. In the 2007 financial year Hannover Re (Bermuda) Ltd. extended a loan due on 31 May 2012 with a coupon of 4.98% to Talanx AG, the volume of which as at the balance sheet date was unchanged at EUR 51.5 million (EUR 51.5 million). The carrying amount includes accrued interest of EUR 1.5 million (EUR 1.5 million). This instrument was recognised under other invested assets. As part of long-term lease arrangements companies belonging to the Hannover Re Group rented out business premises in 2010 to HDI Direkt Versicherung AG, Hannover. In addition, lease agreements exist with Talanx Service AG, Hannover, AmpegaGerling Asset Management GmbH, Cologne, and HDI-Gerling Leben Betriebsservice GmbH, Brühl, for use of a portion of the space in our data-processing computer centre. The Group companies E+S Rück, Hannover Finance (Luxembourg) S.A., Hannover Reinsurance (Ireland) Ltd. and Hannover Re (Bermuda) Ltd. invested in a nominal amount of EUR 150.0 million in a bearer debenture of Talanx AG with a term until 8 July 2013 and a coupon of 5.43%. The carrying amount of the instrument, which is recognised under fixed-income securities held to maturity, was EUR 153.9 million (EUR 153.9 million) and included accrued interest of EUR 3.9 million (EUR 3.9 million) as at the balance sheet date. Furthermore, IT and management services were performed for both HDI Direkt Versicherung AG and Protection Reinsurance Intermediaries AG, Hannover, under service contracts. Actuarial opinions with respect to the pension commitments given to staff are drawn up for Hannover Re and E+S Rück by HDI-Gerling Pensionsmanagement AG under an actuarial service contract. Notes Hannover Re Group annual report 2010 7.2 Related party disclosures Notes 177
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Annual Report 2010
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The Hannover Re Group America Europ
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Contents For our investors 2 - 15 L
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Our operational business was impact
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Our life and health reinsurance bus
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years will generate increasing inco
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For our investors Seated from left
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The market capitalisation of the Ha
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Basic information Securities identi
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Strategic objectives 1. Profitable
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Macroeconomic climate The global ec
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Business development We are thoroug
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Non-life reinsurance Accounting for
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Along with the aforementioned natur
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The establishment of the Federal In
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The Die beste volatility Volatilit
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Credit and surety Breakdown of gros
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Thanks not least to a new branch of
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The insurance sector continues to b
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have enlarged our portfolio. In the
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anch in Shanghai concentrates on bu
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Ageing macht creates Märkte market
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Key figures for life and health rei
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new business. Against this backdrop
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The rating agency Standard & Poor
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Rating of fixed-income securities
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In 2009 Hannover Re launched anothe
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Solvency For our company II heißt
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Social commitment Hannover Re’s c
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Opportunity and risk report Overrid
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Available capital and required risk
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Internal risk management and contro
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The table below lists the catastrop
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Sensitivity analysis of the Market
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events. Further significant risk ma
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Gross written premium retained in %
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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
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for orderly performance of their ta
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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
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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
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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
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 and 166: in EUR thousand Other reclassificat
Page 167 and 168: Debt and subordinated capital in EU
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: Maturity structure of derivative fi
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
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Annual Report 2010 - Hannover Re

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