Annual Report 2010 - Hannover Re

Development of policyholders’ surplus in EUR million
6,987
7,000
1,385
5,621 1 6,000
5,295
484
4,878
885
4,708
5,000
897
609
898
480
476
898
542
4,000
474
573
479
609
501
3,000
4,509
2,000
2,898
3,349
3,714
2,830
1,000
0
2006 2007 2008 2009 2010
Shareholders‘ equity Hybrid capital, no maturity
Minority interest Hybrid capital, limited maturity
1 Adjusted on the basis of IAS 8
Hannover Re is guided in its capital management by the requirements
and expectations of the rating agencies that assess
the Group with an eye to its targeted rating. Furthermore,
while making appropriate allowance for business policy considerations
and factors that influence market presence, the
allocation of capital to the Group’s operational companies is
based upon the economic risk content of the business group
in question. Some Group companies are subject to additional
national capital and solvency requirements. All Group companies
met the applicable local minimum capital requirements
in the year under review. Adherence to these capital requirements
is continuously monitored by the responsible organisational
units at the parent company on the basis of the latest
actual figures as well as the corresponding planned and forecast
figures. If, despite the capital allocation mechanisms described
above, a scenario occurs in which there is a danger of
minimum capital requirements being undershot, suitable options
are immediately discussed and measures set in motion
to counteract such an eventuality. From the Group perspective
we manage Hannover Re’s solvency using our internal capital
model, which is described in greater detail on page 57 et seq.
of the risk and opportunity report.
value per share increased accordingly by 21.4% to EUR 37.39.
The changes in shareholders’ equity were shaped chiefly by
the following movements:
The Group net income for 2010 attributable to the shareholders
of the Hannover Re Group climbed to EUR 748.9 million
(EUR 733.7 million).
Net unrealised gains on investments recognised in the other
reserves reached EUR 372.1 million, a figure EUR 130.5 million
higher than at the beginning of the year under review.
This rise derived in particular from the positive development
of markets for alternative investments and the decline in
yields, especially on US treasuries and some non-EU government
bonds.
The reserve for currency translation adjustment improved appreciably
by EUR 171.1 million to –EUR 53.0 million as a consequence
of exchange rate fluctuations of foreign currencies
against the euro in the year under review. The rise in the reserve
for currency translation adjustment resulted above all
from the appreciation of the Australian dollar (AUD) and US
dollar (USD).
Minority interests in Group shareholders’ equity grew by EUR
66.8 million to EUR 608.9 million as at 31 December 2010.
This increase derived primarily from the minority interest in
profit of EUR 82.0 million generated in the year under review.
Development of Group shareholders’ equity in EUR million
6,000
5,117.9
5,000
4,256.6 1
3,921.9
4,000
3,506.5
3,331.5
3,000
2,000
1,000
Group shareholders’ equity
In view of the thoroughly favourable result, the development
of the shareholders’ equity of the Hannover Re Group was
highly gratifying. Compared to the position as at 31 December
2009, it increased by EUR 861.3 million in the year under
review to EUR 5.1 billion. After adjustment for minorities, it
increased by EUR 794.5 million to EUR 4.5 billion. The book
2006 2007 2008 2009 2010
Minorities
Group net income (loss)
Retained earnings excluding Group net income (loss)
Cumulative other comprehensive income
Common shares and additional paid-in capital
1 Adjusted on the basis of IAS 8
0
74 Management report Financial position
Hannover Re Group annual report 2010