For twelve years now our subsidiary Hannover Life Reassurance Ireland (HLR Ireland) has been writing reinsurance business in the international arena with primary insurers and reinsurers. Reinsurance solutions individually tailored to the needs of our clients constitute the basis for this long-standing success story.

The pivotal role played by this unit was further strengthened in the year under review. The assumption by a way of a retrocession from the United States of a mortality-exposed US portfolio that we acquired from Scottish Re in January 2011 was a major factor here. The biometric risk associated with this new block of business fared better than expected, while the profitability of the ING portfolio acquired in 2009 was below average. As we were unable to offset these adverse developments with the new block of business, our underwriting result fell significantly short of that reported in the previous year.

On the investment side we were also compelled to take substantial fair value reductions on our securities deposited with ceding companies owing to the protracted financial crisis. On the other hand, the financial solutions business retroceded from the United States developed in line with our assumptions and our expectations for the assumed UK business were actually exceeded. The business result reported by HLR Ireland was thus shaped by very mixed developments in the year under review.

With a premium volume of EUR 1,230.9 million (EUR 1,267.2 million), HLR Ireland generated a large part of the total premium income booked by Hannover Life Re. Of this, the subsidiary retained 92.7% (EUR 1,141.1 million) for own account. Owing to losses from the fair value measurement of investments as well as adverse movements in exchange rates, the operating profit (EBIT) declined sharply to EUR 36.2 million (EUR 96.7 million). This produced an EBIT margin of 3.2%. Net income after tax of EUR 31.7 million was reported.