Non-life reinsurance

We were highly satisfied with the development of our business in non-life reinsurance, even though competition continued to intensify relative to the previous year. Despite our selective underwriting policy we were able to further enlarge our premium volume. Gross premium increased by 1.3% as at 31 December 2013 to EUR 7.8 billion (previous year: EUR 7.7 billion). At constant exchange rates growth would have amounted to 3.5%. We thus came in within our forecast target of 3% to 5% for the full financial year.

Investment income from assets under own management for non-life reinsurance contracted by 17.7% year-on-year to EUR 766.2 million (EUR 930.8 million). This was due in part to the low interest rate level and also to the elimination of positive special effects, which in 2012 had resulted from higher realised gains and the gratifying fair value development of the inflation swaps. The operating profit (EBIT) of EUR 1,061.0 million fell only slightly short of the previous year’s result (EUR 1,091.4 million). The underwriting result was thoroughly pleasing. The combined ratio improved on the previous year’s good level of 95.8% to reach 94.9%. The EBIT margin of 15.5% came in comfortably above our strategic target of 10% and reflects the outstanding result in non-life reinsurance. Group net income increased by 17.8% to EUR 807.7 million (EUR 685.6 million) and is thus the best performance to date in non-life reinsurance in Hannover Re’s history.