Results of operations
Results of operations
The 2013 financial year passed off satisfactorily for Hannover Rück SE. The gross premium of Hannover Rück SE in total business increased by 5.6% to EUR 11.1 billion (previous year: EUR 10.5 billion). The level of retained premium retreated slightly from 76.0% to 75.2%. Net premium earned grew by 5.1% to EUR 8.2 billion (EUR 7.8 billion).
The underwriting result for total business (before changes in the equalisation reserve) declined in the year under review from EUR 93.2 million to -EUR 4.7 million. An amount of EUR 267.7 million (EUR 340.7 million) was allocated to the equalisation reserve and similar provisions.
After a thoroughly untroubled first quarter we incurred numerous major losses in the course of 2013. Germany and Canada were especially heavily impacted by considerable losses from natural disasters. The hurricane season in North America and the Caribbean, on the other hand, again passed off unremarkably. The largest single losses in the year under review for Hannover Re were the hail event “Andreas” in Germany with a net loss of EUR 11.6 million and the flooding in Germany and other European countries at a cost of EUR 21.6 million. These and other major losses caused total net expenditure in 2013 of EUR 283.2 million (EUR 318.3 million).
| Condensed profit and loss account of Hannover Rück SE | ||
| in EUR thousand | 2013 | 2012 |
|---|---|---|
| Earned premiums, net of retrocession | 8,209,507 | 7,808,183 |
| Allocated investment return transferred from the non-technical account, net of retrocession | 194,599 | 214,966 |
| Other technical income, net of retrocession | 425 | 1 |
| Claims incurred, net of retrocession | 6,254,293 | 5,843,453 |
| Changes in other technical provisions, net of retrocession | 21,669 | (8,902) |
| Bonuses and rebates, net of retrocession | 1,963 | 1 |
| Operating expenses, net of retrocession | 2,171,507 | 2,073,564 |
| Other technical charges, net of retrocession | 3,121 | 3,988 |
| Subtotal | (4,684) | 93,242 |
| Change in the equalisation reserve and similar provisions | (267,717) | (340,657) |
| Net technical result | (272,401) | (247,415) |
| Investment income | 1,385,550 | 1,320,197 |
| Investment charges | 268,993 | 86,275 |
| Allocated investment return transferred to the technical account | (247,895) | (265,880) |
| Other income | 109,866 | 77,868 |
| Other charges | 325,993 | 252,530 |
| Profit or loss on ordinary activities before tax | 380,134 | 545,965 |
| Taxes on profit and income and other taxes | 12,973 | 135,711 |
| Profit for the financial year | 367,161 | 410,254 |
| Profit brought forward from previous year | 89,209 | 40,746 |
| Withdrawals from other retained earnings | – | 1,021 |
| Allocations to other retained earnings | 370 | 1,021 |
| Disposable profit | 456,000 | 451,000 |
Ordinary investment income including deposit interest clearly surpassed the previous year at EUR 1,304.8 million (EUR 1,205.9 million). This figure includes the non-recurring effect from transformation of our UK life reinsurance subsidiary into a branch in an amount of EUR 231.4 million. Net gains of EUR 43.5 million (EUR 68.9 million) were realised on disposals. Write-downs of EUR 186.7 million (EUR 25.4 million) were taken on investments. They were attributable principally to shares in affiliated companies and fixed-income securities. The write-downs contrasted with write-ups of EUR 14.4 million (EUR 29.6 million) that were made on assets written down in previous periods in order to reflect increased fair values. Provisions for contingent losses of EUR 21.7 million were established in the reporting period due to lower fair values of some of our inflation swaps. These new provisions were opposed by reversals of provisions for contingent losses constituted for technical derivatives in an amount of just EUR 6.1 million.
All in all, our net investment result therefore contracted to EUR 1,116.6 million (EUR 1,233.9 million).
The profit on ordinary activities decreased to EUR 380.1 million (EUR 546.0 million). The year under review closed with a profit for the year of EUR 367.2 million (EUR 410.3 million).