Group shareholders’ equity
In view of the favourable result, the development of the shareholders’ equity of the Hannover Re Group was pleasing.Compared to the position as at 31 December 2011, it increased by EUR 1,133.6 million in the year under review to EUR 6,740.3 million. After adjustment for non-controlling interests, it increased by EUR 1,085.2 million to EUR 6,055.8 million. The book value per share increased accordingly by 21.8% to EUR 50.22. The changes in shareholders’ equity were shaped chiefly by the following developments:
Net unrealised gains on investments recognised in the other reserves reached EUR 987.9 million, a figure EUR 534.8 million higher than at the beginning of the year under review. This rise derived, on the one hand, from the decline in yields on bonds of various European countries such as Germany, France and the United Kingdom as well as on bonds issued by semi-governmental entities. Most significantly, however, the sometimes appreciable narrowing of credit spreads on corporate bonds and asset-backed securities played a considerable part in the rise in hidden reserves, especially in view of the increased holdings of these asset classes in recent years.
The reserve for currency translation adjustment decreased by EUR 27.8 million from EUR 11.6 million to -EUR 16.2 million as a consequence of exchange rate fluctuations of foreign currencies against the euro in the year under review. The fall in the reserve for currency translation adjustment resulted principally from translation of the shareholders’ equity of subsidiaries with a foreign functional currency; the depreciation of the US dollar and South African rand and, as an opposite effect, the appreciation of the pound sterling, were particularly significant here.
In addition, a change in equity from hedging instruments had to be recognised directly in equity for the first time in an amount of -EUR 9.5 million; this resulted from forward exchange contracts held in the year under review to hedge currency risks from long-term investments in foreign operations.
Non-controlling interests in Group shareholders’ equity grew by EUR 48.4 million to EUR 684.5 million as at 31 December 2012. This increase was attributable primarily to the non-controlling interests in E+S Rückversicherung AG in an amount of EUR 39.4 million and in Secquaero ILS Funds Ltd. in an amount of EUR 14.5 million. The non-controlling interest in Hannover Re Real Estate Holdings Inc., on the other hand, decreased by EUR 6.6 million.
The Group net income for 2012 attributable to the shareholders of the Hannover Re Group increased to EUR 858.3 million (EUR 606.0 million). The non-controlling interest in the profit generated in the year under review totalled EUR 75.4 million (EUR 70.8 million).