Annual Report 2010 - Hannover Re
Annual Report 2010 - Hannover Re
Annual Report 2010 - Hannover Re
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Cash flow from operating activities<br />
Consolidated cash flow statement<br />
in EUR million<br />
The cash flow from operating activities, which also includes<br />
inflows from interest received and dividend receipts, amounted<br />
to EUR 1.7 billion in the year under review as opposed to<br />
EUR 1.8 billion in the previous year. Despite higher claim payments<br />
in the financial year, the net inflow was thus only slightly<br />
lower than that of the previous year – principally due to the<br />
improvement in investment income over the previous year.<br />
Cash flow from investing activities<br />
The net cash outflows from investing activities amounted to<br />
altogether EUR 2.0 billion in <strong>2010</strong>, as against EUR 1.8 billion<br />
in the previous year. Along with the move back into equities<br />
and the acquisition of real estate, predominantly in the United<br />
States and Germany, the funds were used primarily to further<br />
enlarge the portfolio of high-quality fixed-income securities.<br />
Investments were made principally in corporate bonds and<br />
asset-backed securities, while the share of government bonds<br />
and debt securities of semi-governmental entities was reduced.<br />
<strong>Re</strong>garding the development of the investment portfolio please<br />
see also our remarks in the “Investments” section of the management<br />
report.<br />
Financial strength ratings<br />
<strong>2010</strong> 2009<br />
Cash flow from operating activities 1,681.3 1,751.9<br />
Cash flow from investing activities (1,993.7) (1,786.3)<br />
Cash flow from financing activities 283.3 57.7<br />
Exchange rate differences on cash 46.9 3.9<br />
Change in cash and cash<br />
equivalents 17.8 27.2<br />
Cash and cash equivalents at the<br />
beginning of the period 457.4 430.2<br />
Change in cash and cash equivalents<br />
according to cash flow statement 17.8 27.2<br />
Cash and cash equivalents at the<br />
end of the period 1 475.2 457.4<br />
1 Thereof attributable to disposal groups: EUR 27.5 million<br />
(previous year: none)<br />
A.M. Best and Standard & Poor’s, the rating agencies of particular<br />
relevance to the insurance industry, assess the financial<br />
strength of <strong>Hannover</strong> <strong>Re</strong> on the basis of an interactive rating<br />
process and have awarded it very good ratings. The rating<br />
agencies highlight in particular the strength of the <strong>Hannover</strong><br />
<strong>Re</strong> Group’s competitive position, its capitalisation and its risk<br />
management.<br />
Cash flow from financing activities<br />
Compared to the previous year, the cash inflows from financing<br />
activities increased from EUR 57.7 million to EUR 283.3<br />
million. This rise was due first and foremost to the inflow from<br />
placement of the subordinated debt <strong>2010</strong>/2040 in an amount<br />
of nominally EUR 500.0 million. This increase was in turn reduced<br />
accordingly by the dividend of EUR 253.3 million paid<br />
by the parent company <strong>Hannover</strong> <strong>Re</strong> in the year under review.<br />
Financial strength ratings of the <strong>Hannover</strong> <strong>Re</strong> Group<br />
Standard<br />
& Poor’s<br />
Rating AA –<br />
(very<br />
strong)<br />
A.M.Best<br />
A<br />
(excellent)<br />
Outlook stable positive<br />
Overall, the cash and cash equivalents thus increased by EUR<br />
17.8 million year-on-year to EUR 475.2 million.<br />
For further information on our liquidity management please<br />
see page 69 et seq. of the risk report.<br />
76 Management report Financial position<br />
<strong>Hannover</strong> <strong>Re</strong> Group annual report <strong>2010</strong>
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