14 April 2003 Press conference on the annual results 2002 15 April 2003 DVFA Analysts’ meeting, Frankfurt 15 April 2003 Analysts’ meeting, London 27 May 2003 Annual General Meeting Beginning 10:30 a.m.
Dragged down by the poor performance of the US indices (-16% on the Dow Jones and -31.5% on the NASDAQ), European equity markets heavily lost ground as well: the EuroStoxx 50 gave up 37% of its value, while the Dax fell by as much as 44%. Similarly, the MDax (which includes the Hannover Re share) recorded a significant drop of 29%. Government bonds consequently remained investors' preferred investment alternative, ahead of corporate bonds with first-class ratings.
With total damage in the order of USD 17 billion, Hurricane "Andrew" in 1992 had hitherto unparalleled financial repercussions and ranks as the second-largest insurance loss of all time. Had the storm track been a mere 20 kilometres further to the north, estimates suggest the losses could have been three to four times greater. Hurricanes that make landfall on the North American continent are particularly significant loss events for the insurance industry. After "Andrew", the severest hurricanes – measured by loss amount – were "Hugo" (1989), "Floyd" (1999) and "Fran" in 1996. Windstorms cause more damage worldwide than earthquakes, volcanic eruptions and floods combined.
On the reinsurance market the cessation of operations by a major competitor caused quite a stir and sharply reduced the available capacities. In this climate our subsidiary E+S Rück – a wellestablished reinsurer with first-class ratings that bears exclusive responsibility for the German market – was able to consolidate its position and build up attractive new business relationships.
Following the fundamental exclusion of terrorism coverages from standard treaties, we offer separate, strictly controlled special arrangements for such risks on an opportunistic basis.
The recovery on the primary insurance market has still to make itself fully felt in the reinsurance sector. The combined ratio across all US reinsurers was 121.3% as at year-end. It is anticipated that the industry as a whole will move back into the black in the second half of 2003 at the earliest.
We see considerable growth potential in the countries of the former Soviet Union
million (EUR 321 million) on a pre-tax basis as at 31 December 2002, developed as follows: Figures in EUR million 2002 2001 2000 1999
Ireland Hannover Life Re Ireland, Dublin, writes treaty business on a worldwide basis. Premium income surged by 140% to EUR 306.4 million, with its main markets being the USA, the United Kingdom and Canada.
Intensive controlling of the business brought substantial rehabilitation of Clarendon’s portfolio
The proverbial ground under our feet is our living space and a source of food supply.
Overall, then, we can assert, firstly, that we only have a relatively low exposure in the areas of asbestos and pollution risks. Secondly, we have constituted extensive reserves for such potential exposures. Consequently, we do not expect to incur any significant risks from these areas in the future.
This trend in the labour force is the product of our systematically implemented strategy geared to profit-oriented growth in target markets where we are represented by expert staff.
With the aid of agreements on targets we support our unceasing efforts to accomplish the objectives derived from our corporate strategy – for every single area of the company and each member of our managerial staff. This process of management by objectives has been defined for the entire Hannover Re Group and thus ensures that managerial staff identify with the company 's goals. The system of variable remuneration is consequently based on the level of goal accomplishment, hence creating incentives for a commitment that is in every respect rewarding.
managers is a hallmark of all the markets we operate in. Reinsurance is a highly complex financial service, the success of which is crucially dependent on the expertise, motivation and dedication of our staff. With this in mind we maintain close contacts with, inter alia, a number of universities and set great store in personnel development and training measures.
The current economic climate is clouded by considerable uncertainty. The Iraq war and the fear of renewed terrorist attacks have darkened the mood. We find ourselves in what is evidently a sustained downturn. There is still no sign of an end to this downward slide: experts expect 2003 to remain sluggish, with growth of at best 1% to 2%. Some central banks, including the ECB, have announced further interest rate cuts with the hope of injecting new life into the economy. Yet in the current situation it remains open to question whether these money market moves will have their intended effect. The mood on capital markets is sombre, and there is little indication of improvement in the near term.
Favourable development anticipated in financial reinsurance due to growing demand for individually tailored solutions
Cumulative foreign currency conversion adjustment, net of deferred taxes (100 276) (58 192)
Commission and brokerage and other technical expenses 543 154 590 366 478 322 489 652 in TEUR Property/casualty reinsurance
Hannover Life Reassurance (Ireland) Ltd., 100.0 EUR 98 600 EUR (1 668) Dublin/Ireland
Hannover Euro Private Equity Partners III GmbH & Co. KG (HEPEP III)
Investments were valued in accordance with SFAS 115 "Accounting for Certain Investments in Debt and Equity Securities". The allocation and valuation of investments are guided by the investment intent.
Due after five through ten years 130 000 138 330 75 095 64 465
Due after five through ten years – – 38 789 39 016
Present value of future profits on acquired life reinsurance portfolios 14 621 17 015
• A reliable benchmark is used to measure the increase in the company's value (change in Hannover Re's share price relative to the unweighted "Reactions" World Reinsurance Index
• Two seminars for analysts and investors were held in order to meet the need for supplementary and more detailed background information
In December 2002 the Executive Board and Supervisory Board of Hannover Re approved the company's own Corporate Governance principles, which incorporate most of the recommendations and suggestions of the German Code. In doing so we created a precise set of companyspecific rules encompassing an entire system of responsible enterprise management and supervision oriented towards value creation.
Haftpflichtverband der Deutschen Industrie V.a.G (HDI). . . . . . . . . 5, 15, 62, 78, 80, 100f., 108f., 119
Value of in-force business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 38f., 130