4.2 Consolidated companies and complete list of shareholdings
In addition to Hannover Rückversicherung AG as the parent company of the Group, the scope of consolidation of the Hannover Re Group encompasses the companies listed in the table below.
Scope of consolidation | ||
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Number of companies | 2012 | 2011 |
1 Consists of: 20 (19) individual companies and 38 (36) companies which are fully consolidated in 3 (3) subgroups. 2 Consists of: 2 (1) associated companies and 4 (5) companies which are included at equity in 1 (1) subgroup |
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Consolidated companies | ||
Germany | 17 | 16 |
Abroad1 | 55 | 52 |
Total | 72 | 68 |
Consolidated special purpose entities and special funds | ||
Abroad1 | 3 | 3 |
Sum total | 75 | 71 |
Companies included at equity | ||
Germany | 3 | 3 |
Abroad2 | 6 | 6 |
Total | 9 | 9 |
The following list of shareholdings is provided in full in the present Group annual financial report in accordance with § 313 German Commercial Code (HGB) as amended by the Act on the Modernisation of Accounting Law (BilMoG).
In conformity with Item 7.1.4 of the recommendations of the German Corporate Governance Code as amended on 15 May 2012, the following table also lists the percentage share in capital, the capital and reserves and the result for the last financial year for major participations in unconsolidated third companies.
The figures for the capital and reserves as well as the result for the last financial year are taken from the local financial statements drawn up by the companies.
With regard to the major acquisitions and disposals in the year under review please see our remarks in the following paragraphs of this section.
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List of shareholdings | ||||
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Name and registered office of the company in currency units of 1,000 |
Participation in % |
Currency | Capital and reserves | Result for the last financial year |
1Provisional (unaudited) figures
2 Year-end result after profit transfer 3 Financial year as at 30 September 2012 4 Figures as at 31 December 2011 5 Company was newly established in 2012; an annual financial statement is not yet available 6 Formerly Hannover Life Reassurance (Ireland) PLC, merged with Hannover Reinsurance (Ireland) PLC 7 Financial year as at 30 October 2011 8 Financial year as at 31 March 2012 9 IFRS figures 10 Company is in liquidation 11 Certain equity items are not counted under IFRS, as a consequence of which the amount of capital and reserves can be negative here. According to the local accounting practice relevant for supervisory purposes, the company is adequately capitalised. 12 Company is inactive 13 Last annual financial statement compiled as at 31 December 1999 14 Company was newly established in 2011; business operations have not commenced to date |
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Affiliated companies resident in Germany | ||||
Hannover Rück Beteiligung Verwaltungs-GmbH, Hannover/Germany1,2 | 100.00 | EUR | 2,071,855 | – |
Hannover Life Re AG, Hannover/Germany1,2 | 100.00 | EUR | 1,582,596 | – |
HILSP Komplementär GmbH, Hannover/Germany3 | 100.00 | EUR | 25 | (1) |
Hannover Insurance-Linked Securities GmbH & Co. KG, Hannover/Germany3 | 100.00 | EUR | 55,855 | 5,036 |
Funis GmbH & Co. KG, Hannover/Germany3 | 100.00 | EUR | 24,353 | (10,687) |
Hannover America Private Equity Partners II GmbH & Co. KG, Hannover/Germany3 | 95.28 | EUR | 205,314 | 20,299 |
HAPEP II Holding GmbH, Hannover/Germany3 | 95.28 | EUR | 30,305 | 8,638 |
HAPEP II Komplementär GmbH, Hannover/Germany3 | 81.84 | EUR | 27 | – |
Hannover Re Euro PE Holdings GmbH & Co. KG, Hannover/Germany3 | 90.92 | EUR | 83,826 | 1,219 |
Hannover Re Euro RE Holdings GmbH, Hannover/Germany4 | 81.84 | EUR | 181,975 | 1,163 |
HR GLL Central Europe GmbH & Co. KG, Munich/Germany5 | 74.40 | EUR | 110 | – |
Hannover Euro Private Equity Partners III GmbH & Co. KG, Cologne/Germany3 | 67.08 | EUR | 42,815 | 6,394 |
HEPEP III Holding GmbH, Cologne/Germany3 | 67.08 | EUR | 9,546 | 393 |
E+S Rückversicherung AG, Hannover/Germany1 | 63.69 | EUR | 733,413 | 142,000 |
Hannover Euro Private Equity Partners IV GmbH & Co. KG, Cologne/Germany3 | 60.17 | EUR | 86,192 | 3,542 |
Hannover Euro Private Equity Partners II GmbH & Co. KG, Cologne/Germany3 | 57.50 | EUR | 8,709 | 8,422 |
HEPEP II Holding GmbH, Cologne/Germany3 | 57.50 | EUR | 4,539 | 4,508 |
Affiliated companies resident abroad | ||||
Hannover Finance (Luxembourg) S.A., Luxembourg/Luxembourg1 | 100.00 | EUR | 30,475 | (1,304) |
Hannover Finance (UK) Limited, Virginia Water/United Kingdom1 | 100.00 | GBP | 131,102 | 19 |
Hannover Life Reassurance Bermuda Ltd., Hamilton/Bermuda | 100.00 | EUR | 202,559 | 29,928 |
Hannover Life Reassurance Company of America, Orlando/USA1 | 100.00 | USD | 180,976 | 9,378 |
Hannover Re (Ireland) Public Limited Company, Dublin/Ireland1,6 | 100.00 | EUR | 1,318,616 | 106,336 |
Hannover Life Reassurance (UK) Limited, Virginia Water/United Kingdom1 | 100.00 | GBP | 38,751 | 2,834 |
Hannover Life Re of Australasia Ltd, Sydney/Australia1 | 100.00 | AUD | 336,480 | 38,073 |
Hannover Re (Bermuda) Ltd., Hamilton/Bermuda 1 | 100.00 | EUR | 1,056,837 | 169,716 |
Hannover ReTakaful B.S.C. (c), Manama/Bahrain1 | 100.00 | BHD | 41,070 | 6,768 |
Hannover Services (UK) Limited, Virginia Water/United Kingdom | 100.00 | GBP | 666 | 4 |
International Insurance Company of Hannover Limited, Bracknell/United Kingdom1 | 100.00 | GBP | 121,759 | 6,259 |
Inter Hannover (No.1) Limited, London/United Kingdom1 | 100.00 | GBP | (4,265) | 1 |
Leine Investment General Partner S.à r.l., Luxembourg/Luxembourg5 | 100.00 | EUR | 30 | – |
Leine Investment SICAV-SIF, Luxembourg/Luxembourg5 | 100.00 | USD | 200 | – |
Hannover Re (Guernsey) PCC Limited, St Peter Port/Guernsey1 | 100.00 | EUR | 254 | 2 |
Fracom FCP, Paris/France7 | 100.00 | EUR | 877,017 | 25,935 |
Kaith Re Ltd., Hamilton/Bermuda1 | 88.00 | USD | 95 | (291) |
Integra Insurance Solutions Limited, Bradford/United Kingdom8 | 74.99 | GBP | 509 | 636 |
Secquaero ILS Fund Ltd., Georgetown, Grand Cayman/Cayman Islands9 | 74.09 | USD | 73,651 | 2,884 |
Svedea AB, Stockholm/Sweden | 53.00 | SEK | 4,630 | (44,890) |
Subgroups resident abroad | ||||
Hannover Finance, Inc., Wilmington/USA9 | 100.00 | USD | 509,913 | 9,087 |
Hannover Finance, Inc. compiles its own subgroup financial statement in which the following major companies are included: |
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Consolidated companies | ||||
Clarendon Insurance Group, Inc., Wilmington/USA | 100.00 | USD | 221,640 | – |
Atlantic Capital Corporation, Wilmington/USA9,10,11 | 100.00 | USD | (111,867) | – |
Hannover Reinsurance Group Africa (Pty) Ltd., Johannesburg/South Africa | 100.00 | ZAR | 210,017 | 154,417 |
Hannover Reinsurance Group Africa (Pty) Ltd. compiles its own subgroup financial statement in which the following companies are included: |
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Consolidated companies | ||||
Hannover Life Reassurance Africa Limited, Johannesburg/South Africa | 100.00 | ZAR | 416,212 | (7,678) |
Hannover Reinsurance Africa Limited, Johannesburg/South Africa | 100.00 | ZAR | 781,523 | 145,608 |
Compass Insurance Company Limited, Johannesburg/South Africa | 100.00 | ZAR | 109,595 | 229 |
Micawber 185 (Pty) Ltd., Johannesburg/South Africa | 100.00 | ZAR | 17,976 | 2,121 |
Peachtree (Pty) Ltd., Johannesburg/South Africa10 | 100.00 | ZAR | – | – |
Hannover Reinsurance Mauritius Ltd., Port Louis/Mauritius | 100.00 | MUR | 50,178 | 3,785 |
Lireas Holdings (Pty) Ltd., Johannesburg/South Africa | 51.00 | ZAR | 189,537 | 21,353 |
Transit Underwriting Managers (Pty) Ltd., Cape Town/South Africa | 51.00 | ZAR | 991 | 185 |
MUA Insurance Company Ltd., Cape Town/South Africa | 51.00 | ZAR | 10,332 | 547 |
MUA Insurance Acceptances (Pty) Ltd., Cape Town/South Africa | 40.80 | ZAR | 2,207 | (2,168) |
Garagesure Consultants and Acceptances (Pty) Ltd., Johannesburg/South Africa | 40.80 | ZAR | 955 | 1,614 |
Cargo Transit Insurance (Pty) Ltd., Helderkruin/South Africa | 40.80 | ZAR | (4,499) | (1,977) |
Landmark Underwriting Agency (Pty) Ltd., Bloemfontein/South Africa | 38.51 | ZAR | 2,586 | (361) |
Hospitality Industrial and Commercial Underwriting Managers (Pty) Ltd., Johannesburg/South Africa |
36.82 | ZAR | 2,375 | 2,472 |
SUM Holdings (Pty) Ltd., Johannesburg/South Africa | 36.82 | ZAR | 19,068 | 3,418 |
Thatch Risk Acceptances (Pty) Ltd., Cape Town/South Africa | 33.14 | ZAR | 1,466 | 2,219 |
Gem & Jewel Acceptances (Pty) Ltd., Johannesburg/South Africa | 30.60 | ZAR | 974 | 3,116 |
Construction Guarantee (Pty) Ltd., Parktown/South Africa10 | 30.60 | ZAR | – | 6,969 |
Envirosure Underwriting Managers (Pty) Ltd., Durban/South Africa | 30.60 | ZAR | (415) | 1,275 |
Woodworking Risk Acceptances (Pty) Ltd., Pietermaritzburg/South Africa | 30.60 | ZAR | 540 | (970) |
Film & Entertainment Underwriters SA (Pty) Ltd., Johannesburg/South Africa | 26.01 | ZAR | (1,444) | 35 |
Associated companies | ||||
Firedart & Construction Guarantee Underwriting Managers (Pty) Ltd., Johannesburg/South Africa | 25.45 | ZAR | 11,321 | 6,473 |
Commercial & Industrial Acceptances (Pty) Ltd., Johannesburg/South Africa | 20.40 | ZAR | 14,460 | 23,236 |
Clarendon Transport Underwriting Managers (Pty) Ltd., Johannesburg/South Africa1 | 16.66 | ZAR | 21,400 | 44,794 |
Camargue Underwriting Managers (Pty) Ltd., Parktown/South Africa | 13.26 | ZAR | 7,274 | 3,168 |
Participations (non-consolidated) | ||||
Clarenfin (Pty) Ltd., Johannesburg/South Africa12 | 16.66 | ZAR | – | – |
Hannover Re Real Estate Holdings, Inc., Orlando/USA9 | 95.10 | USD | 377,855 | 32,023 |
Hannover Re Real Estate Holdings, Inc. compiles its own subgroup financial statement in which the following companies are included: |
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Consolidated companies | ||||
5115 Sedge Corporation, Chicago/USA9 | 95.10 | USD | 564 | (1,075) |
5115 Sedge Boulevard, LP, Chicago/USA9,11 | 95.10 | USD | (1,574) | (1,622) |
GLL HRE CORE PROPERTIES, LP, Wilmington/USA9 | 95.00 | USD | 198,698 | 38,168 |
11 Stanwix, LLC, Pittsburgh/USA9 | 95.00 | USD | 30,139 | 546 |
One Winthrop Square, LLC, Wilmington/USA9 | 95.00 | USD | 22,196 | 630 |
402 Santa Monica Blvd, LLC, Wilmington/USA9 | 95.00 | USD | 31,358 | 706 |
300 South Orange Avenue, LLC, Orlando/USA9 | 95.00 | USD | 55,104 | 1,209 |
465 Broadway, LLC, Wilmington/USA9,10 | 95.00 | USD | (1,085) | 13,757 |
Nashville (Tennessee) West, LLC, Wilmington/USA9 | 95.00 | USD | 30,611 | (217) |
1225 West Washington, LLC, Tempe/USA9 | 95.00 | USD | 22,162 | 31 |
975 Carroll Square, LLC, Washington D.C./USA9 | 95.00 | USD | 60,519 | 431 |
GLL Terry Francois Blvd, LLC, Wilmington/USA9,10 | 48.40 | USD | 4,823 | 51,980 |
Associated companies resident in Germany | ||||
Oval Office Grundstücks GmbH, Hannover/Germany1 | 50.00 | EUR | 59,657 | 1,804 |
WeHaCo Unternehmensbeteiligungs-GmbH, Hannover/Germany4 | 32.74 | EUR | 87,625 | 5,314 |
HANNOVER Finanz GmbH, Hannover/Germany4 | 25.00 | EUR | 70,674 | 7,194 |
Associated companies resident abroad | ||||
ITAS Vita S.p.A., Trent/Italy4 | 34.88 | EUR | 76,354 | 55 |
ASPECTA Assurance International AG, Vaduz/Liechtenstein4 | 30.00 | CHF | 15,964 | 6,297 |
Participations abroad (non-consolidated) | ||||
International Hannover Holding AG, Hannover/Germany12 | 100.00 | EUR | 44 | (3) |
Capital System GmbH, Hannover/Germany4 | 49.00 | EUR | 211 | (64) |
Participations abroad (non-consolidated) | ||||
International Mining Industry Underwriters Limited, London/United Kingdom1 | 100.00 | GBP | 480 | 70 |
HR Hannover Re, Correduría de Reaseguros, S.A., Madrid/Spain1 | 100.00 | EUR | 266 | 35 |
LRA Superannuation Plan Pty Ltd., Sydney/Australia12 | 100.00 | AUD | – | – |
Mediterranean Reinsurance Services Ltd., Hong Kong/China10,13 | 100.00 | USD | 125 | – |
Hannover Re Services Japan K.K., Tokio/Japan1 | 100.00 | JPY | 94,533 | 1,683 |
Hannover Re Consulting Services India Private Limited, Mumbai/India8 | 100.00 | INR | 58,620 | 7,973 |
Hannover Life Re Consultants, Inc., Orlando/USA4 | 100.00 | USD | 201 | 2 |
Hannover Services (México) S.A. de C.V., Mexico City/Mexico4 | 100.00 | MXN | 10,777 | 225 |
Hannover Re Services USA, Inc., Itasca/USA | 100.00 | USD | 872 | 27 |
Hannover Rückversicherung AG Escritório de Representação no Brasil Ltda., Rio de Janeiro/Brazil4 | 100.00 | BRL | 320 | (58) |
L&E Holdings Limited, London/United Kingdom1 | 100.00 | GBP | 9 | 82 |
London & European Title Insurance Services Limited, London/United Kingdom1 | 100.00 | GBP | 80 | (283) |
Hannover Re Services Italy S.R.L., Milan/Italy1 | 99.64 | EUR | 485 | 103 |
Glencar Underwriting Managers, Inc., Itasca/USA4 | 95.90 | USD | 1,789 | (713) |
Secquaero Re Vinyard IC Ltd., St Peter Port/Guernsey5 | 74.09 | USD | 2,075 | – |
Hannover Care AB, Stockholm/Sweden4 | 30.00 | SEK | 446 | (1,363) |
Energi, Inc., Peabody/MA, USA4 | 28.50 | USD | 6,758 | (884) |
Energi Insurance Services, Inc., Peabody/MA, USA4 | 28.50 | USD | 738 | (567) |
Energi of Canada Ltd., Toronto/Kanada14 | 28.50 | CAD | – | – |
Energi Re, LLC, Dover/USA4 | 28.50 | USD | 336 | 86 |
Hurst Holme Insurance Company Limited – account 2006-03 SCC, Hamilton/Bermuda4 | 28.50 | USD | 818 | 38 |
Hurst Holme Insurance Company Limited – account 2009-01 SCC, Hamilton/Bermuda4 | 28.50 | USD | 2,577 | 1,000 |
XS Direct Holdings Limited, Dublin/Irland4 | 25.00 | EUR | 1,741 | (3,129) |
SimShare Limited, Dublin/Irland4 | 25.00 | EUR | 645 | (2,448) |
XS Direct Insurance Brokers Limited, Dublin/Irland4 | 25.00 | EUR | 36 | 208 |
Indemnity Guarantee Company Limited, Dublin/Irland4,10 | 25.00 | EUR | (6) | – |
Sciemus Power MGA Limited, London/United Kingdom4 | 25.00 | GBP | 1 | – |
PlaNet Guarantee (SAS), Saint-Ouen/France4 | 23.58 | EUR | 651 | (797) |
Iconica Business Services Limited, Bradford/United Kingdom5 | 18.75 | GBP | 301 | – |
Acte Vie S.A. Compagnie d’Assurances sur la Vie et de Capitalisation, Strasbourg/France4 | 9.38 | EUR | 8,404 | 140 |
Consolidation of special purpose entities
Business relations with special purpose entities are to be examined in accordance with SIC-12 “Consolidation – Special Purpose Entities” with an eye to their implications for consolidation. In cases where IFRS do not currently contain any specific standards, Hannover Re’s analysis – in application of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” – also falls back on the relevant standards of US GAAP.
Retrocessions and Insurance-Linked Securities (ILS)
Since 2010, as part of its extended Insurance-Linked Securities (ILS) activities, Hannover Re has written a number of so-called collateralised fronting arrangements under which risks assumed from ceding companies are passed on to institutional investors outside the Group using special purpose entities. The purpose of such transactions is to directly transfer clients’ business. Due to the lack of a controlling influence over the special purpose entities involved, there is no consolidation requirement for Hannover Re with respect to these structures.
In connection with the sale of the operational companies of the subgroup Clarendon Insurance Group, Inc. (CIGI), Wilmington, to Enstar Group Ltd., Hamilton/Bermuda, in July 2011, a partial portfolio of CIGI was retroceded to a special purpose entity. The term of the retrocession arrangement runs until the underlying obligations have been finally settled. Since Hannover Re is not the major beneficiary of the special purpose entity and does not exercise either indirect or direct control over it, there is no requirement to consolidate this special purpose entity.
Securitisation of reinsurance risks
The securitisation of reinsurance risks is largely structured through the use of special purpose entities.
In September 2012 Hannover Re issued another catastrophe (“CAT”) bond for the purpose of transferring to the capital market peak natural catastrophe exposures deriving from European windstorm events. The term of the CAT bond, which has a volume of nominally EUR 100.0 million, runs until 31 March 2016; it was placed with institutional investors from Europe, North America and Asia by Eurus III Ltd. Eurus III Ltd. is a special purpose entity domiciled in Hamilton/Bermuda that was registered in August 2012 as a “special purpose insurer” under the Bermuda Insurance Act 1978. The retrocessions concluded with the special purpose entity under the transaction afford Hannover Re, E+S Rückversicherung AG and Hannover Re (Bermuda) Ltd. protection against the aforementioned catastrophe risks. Since Hannover Re does not exercise a controlling influence over Eurus III Ltd., there is no consolidation requirement for the special purpose entity.
By way of its “K” transactions Hannover Re has raised further underwriting capacity for catastrophe risks on the capital market. The “K Cession” (formerly “K6”), which was placed with investors in North America, Europe and Asia, involves a quota share cession on worldwide natural catastrophe business as well as aviation and marine risks. The volume of this securitisation, which was increased in the year under review, was equivalent to EUR 268.0 million (EUR 258.8 million) as at the balance sheet date. The transaction henceforth has an indefinite term and can be cancelled annually by the investors. Kaith Re Ltd., a special purpose entity domiciled in Bermuda, is being used for the securitisation.
Hannover Re also uses the special purpose entity Kaith Re Ltd. for various retrocessions of its traditional covers to institutional investors. In accordance with SIC-12 Kaith Re Ltd. is included in the consolidated financial statement.
In July 2009 Hannover Re issued a catastrophe (“CAT”) bond with the aim of transferring to the capital market peak natural catastrophe exposures deriving from European windstorm events. The CAT bond, which had a volume of nominally EUR 150.0 million, had a term until 31 March 2012 and ended as per the contractual agreement; it was placed with institutional investors from Europe and North America by Eurus II Ltd., a special purpose entity domiciled in the Cayman Islands. Hannover Re did not exercise a controlling influence over the special purpose entity. Under IFRS this transaction was to be recognised as a financial instrument.
Life and health reinsurance assumed
Some transactions in the life and health reinsurance segment necessitate the involvement of ceding special purpose entities as contracting parties that are established by parties outside the Group and from which member companies of the Hannover Re Group assume certain underwriting and/or financial risks in respect of which the probability of occurrence of a loss for Hannover Re is to be categorised as low in each case. The transactions largely serve the purpose of financing statutory reserves (so-called Triple-X or AXXX reserves) and transferring extreme mortality risks above a contractually defined retention. Since Hannover Re does not bear the majority of the economic risks or benefits arising out of its business relations with these special purpose entities and cannot exercise a controlling influence over them, there is no consolidation requirement for Hannover Re. Depending upon the classification of the contracts pursuant to IFRS 4 or IAS 39, the transactions are recognised either in the technical account or as derivative financial instruments or as financial guarantees. Please see also our remarks in Section 8.1 “Derivative financial instruments and financial guarantees”.
Investments
Within the scope of its asset management activities Hannover Re has participated since 1988 in numerous special purpose entities – predominantly funds –, which for their part transact certain types of equity and debt capital investments. On the basis of our analysis of our relations with these entities we concluded that the Group does not exercise a controlling influence in any of these transactions and a consolidation requirement therefore does not exist.
Hannover Re participates – primarily through the companies Secquaero ILS Fund Ltd. (Secquaero) and Hannover Insurance-Linked Securities GmbH & Co. KG (HILS) – in a number of special purpose entities for the securitisation of catastrophe risks by investing in “disaster bonds” (or “CAT bonds”). While HILS will continue to manage its portfolio, future new business in this area will be written by the Leine Investment companies. In this connection please see also our remarks on the companies Leine Investment General Partner S.à. r.l. and Leine Investment SICAV-SIF in Section 4.3 “Major acquisitions and new formations”. Since Hannover Re cannot exercise a controlling influence in any of these transactions either there is no requirement to consolidate the relevant special purposes entities.
Secquaero has established a special purpose entity which is used to transform underwriting risks for the capital market and in which it holds all the voting rights. Given that the scale of the business relations with the special purpose entity is of minor significance to the consolidated financial statement of Hannover Re, the company is not consolidated.