Conference Call on Q1/2024 financial results
Hannover, 14 May 2024
Agenda
4 | Investments | 11 |
5 | Reserving update | 13 |
6 | Outlook 2024 | 15 |
7 | Appendix | 18 |
2 Conference Call on Q1/2024 financial results
| 1 Group ov erv iew | 2 | 3 | 4 | 5 | 6 | 7 |
Favourable Q1/2024 performance fully supports 2024 guidance
Group | P&C reinsurance |
Reinsurance revenue
6,570 | 6,673 |
f/x-adj. | |
+3.0% | |
+1.6% | |
Q1/2023 | Q1/2024 |
Target 2024: > 5% growth1) |
Group net income | Reinsurance revenue (gross) | Combined ratio |
558 | 4.7 bn. | 92.3% | 88.0% | |
+3.1% (f/x-adj. +5.0%) | ||||
484 | ||||
New business CSM & LC (net) | ||||
+15.2% | 1.4 bn. | -4.3%p | ||
+0.1%, f/x and interest-rate adjusted +4% | ||||
Q1/2023 | Q1/2024 | Q1/2023 | Q1/2024 | |
Target 2024: ≥ 2.1 bn.2) | L&H reinsurance | Target 2024: < 89% |
RoERoIAuM
21.3% | 3.3% | 61.4 bn. |
Financial ambition: | Target 2024: | +2.1% |
> 14% | ≥ 2.8% | |
Shareholders' equity | CSM (net) | Solvency ratio |
10.9 bn. | 8.9 bn. | 267% |
+7.1% | +15.2% | Financial ambition: |
> 200% |
All figures in m. EUR unless otherwise stated
- At unchanged f/x rates
- Subject to no major distortions in capital markets and/or major losses not exceeding the large loss budget of EUR 1.825 bn . in 2024
Reinsurance revenue (gross) | Reinsurance service result |
1.9 bn. | 253 | |
-2.1%(f/x-adj.-1.7%) | 211 | |
New business CSM & LC (net) | ||
89 m. | -16.8% | |
+15.1% (-27.2% incl. extensions | Q1/2023 | Q1/2024 |
on existing contracts of 87 m.) | ||
Target 2024: > 850 m. |
3 Conference Call on Q1/2024 financial results
| 1 Group ov erv iew | 2 | 3 | 4 | 5 | 6 | 7 |
Shareholders' equity increased by 7.1%
Increased stock of CSM and RA strengthens earnings outlook
Change in shareholders' equity | Contractual Service Margin (CSM) and Risk Adjustment (RA) |
Total | 12,780 | |||||||||
11,428 | +11.8% | |||||||||
224 | 153 | 10,850 | L&H | |||||||
558 | 2,938 | |||||||||
10,127 | ||||||||||
-212 | ||||||||||
2,885 | RA | |||||||||
P&C | ||||||||||
+4.9% | 974 | |||||||||
844 | ||||||||||
6,064 | L&H | |||||||||
5,950 | CSM | |||||||||
+15.2% | ||||||||||
2,804 | P&C | |||||||||
1,749 | ||||||||||
Shareholders' | Net | Change in | Change in | Currency | Shareholders' | 31.12.2023 | 31.03.2024 | |||
equity | income | OCI | OCI | translation | equity | |||||
31.12.2023 | Reinsurance | Investments | and other | 31.03.2024 | ||||||
Liabilities | ||||||||||
Figuresin EUR m. unless otherwise stated | ||||||||||
4 | Conference Call on Q1/2024 financial results |
Agenda
4 | Investments | 11 |
5 | Reserving update | 13 |
6 | Outlook 2024 | 15 |
7 | Appendix | 18 |
5 Conference Call on Q1/2024 financial results
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 |
Strong profitability of P&C portfolio
Continued growth in a favourable market environment
Property & Casualty R/I
Reinsurance revenue (gross)
Reinsurance revenue (net)
Reinsurance service result
Reinsurance finance result
Investment result
Other result
Operating profit/loss (EBIT)
Combined ratio (net)
New business CSM (net)
New business LC (net)
All figures in m. EUR unless otherwise stated LC = Loss component
Q1/2023 Q1/2024
4,600 4,743
4,101 4,240
315 509
-129-228
298 421
-17-73
466 629
92.3% 88.0%
1,455 1,453
-26-23
∆-%
+3.1%
+3.4%
+61.6%
+76.5%
+41.4%
-
+34.8%
Reinsurance revenue (RR)
- Reinsurance revenue (gross) growth +3.1% (f/x-adjusted +5.0%) mainly driven by Structured Reinsurance/ILS, EMEA and Americas
Reinsurance service result (RSR)
- Large losses of 52 m. below budget of 378 m., however reserved to budget; Baltimore Bridge loss well covered by booked large-loss budget, but too early for initial loss estimate
- Overall positive run-off result of 171 m. from several lines of business, despite negative prior-year development of large losses (Italy hail 102 m.)
- C/R well within target range including ~7% discounting effect
Reinsurance finance result
- Increase reflects movement of interest rates
Investment result
- Strong ordinary income supported by higher fixed-income yields, including 49 m. contribution from inflation-linked bonds
Other result
• Decrease mainly driven by currency result -7 m. (+47 m.)
6 Conference Call on Q1/2024 financial results
| 1 | 2 Property & Casualty reinsurance | 3 | 4 | 5 | 6 | 7 |
Strong increase in CSM driven by successful January renewals
Reinsurance Service Result | Contractual Service Margin (net) |
4000 | |||||||||||
171 | 509 | 1,453 | 28 | ||||||||
2,804 | |||||||||||
418 | -23 | 3000 | -30 | ||||||||
-418 | |||||||||||
-57 | 2000 | 1,749 | 22 | ||||||||
1000 | |||||||||||
0 | |||||||||||
CSM release | Experience variances | Run-off result | LC new business | Reinsurance service | CSM | Currency | New business | Interest | Change in | Regular | CSM |
and other | result | 31.12.2023 | effects | accretion | estimates | release | 31.03.2024 |
- CSM release resulting from successful renewals in 2023 and 2024
- Experience variance mainly driven by low retrocession recovery; no positive impact from large losses below budget (full Q1 budget booked)
- Minor new business LC from 1/1 renewals
- New business CSM & LC (net) of 1,431 m. (f/x and interest-rate adjusted +4%), mainly driven by successful January renewals
- Diversified contribution to new business CSM, mainly driven by Americas and EMEA
- Run-offresult of 171 m. across almost all lines of business, despite unfavourable prior-year development of large losses
All figures in m. EUR unless otherwise stated
7 Conference Call on Q1/2024 financial results
Agenda
4 | Investments | 11 |
5 | Reserving update | 13 |
6 | Outlook 2024 | 15 |
7 | Appendix | 18 |
8 Conference Call on Q1/2024 financial results
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 |
L&H performance supports full-year expectation
Reinsurance service result reflects favourable underlying profitability
Life & Health R/I
Reinsurance revenue (gross)
Reinsurance revenue (net)
Reinsurance service result
Reinsurance finance result
Investment result
Other result
Operating profit/loss (EBIT)
New business CSM (net)
New business LC (net)
Q1/2023 | Q1/2024 |
1,970 | 1,929 |
1,769 | 1,762 |
253 | 211 |
-38 | -33 |
83 | 76 |
-45 | -73 |
253 | 181 |
84 | 97 |
-7 | -8 |
∆-%
-2.1%
-0.4%
-16.8%
-12.0%
-7.6%
+61.2%
-28.5%
Reinsurance revenue (RR)
- Reinsurance revenue (gross) change -2.1%(f/x-adjusted-1.7%)
- Growth in Financial Solutions offset by further reduction of exposure in Mortality and Morbidity business; Longevity stable
Reinsurance service result (RSR)
- RSR fully in line with guidance; normalisation of mortality result compared to extraordinary strong result in prior year
- Continued strong contribution from Financial Solutions and Longevity
- Morbidity impacted by reserve strengthening
Investment result
- Increase in ordinary income offset by negative impact from derivative valuation (f/x hedges)
Other result
• Decrease mainly driven by currency result -30 m. (-4 m.)
All figures in m. EUR unless otherwise stated
9 Conference Call on Q1/2024 financial results
| 1 | 2 | 3 Life & Health reinsurance | 4 | 5 | 6 | 7 |
CSM increase of 1.9% reflects steady growth of future earnings
Reinsurance Service Result
62 | ||||
50 | 211 | |||
184 | ||||
-85 | ||||
CSM release | RA change | Experience variance | LC new business | Reinsurance service |
current/past service | and other | and change in LC | result |
- CSM and risk-adjustment releases in line with expectation
- Experience variance driven by several smaller effects
- Change in LC driven by reserve strengthening for Morbidity business; new business LC -8 m.
Contractual Service Margin (net)
5,950 | 71 | 97 | 93 | 39 | 6,064 | ||
-3 | -184 | ||||||
CSM | Currency | New | Extensions | Interest | Change in | Regular | CSM |
31.12.2023 | effects | business | on existing | accretion | estimates | release | 31.03.2024 |
contracts |
- Diversified contribution to new business CSM from all reporting lines
- Extensions on existing contracts mainly from Financial Solutions and Mortality
- Overall successful new business generation of 190 m.
All figures in m. EUR unless otherwise stated
10 Conference Call on Q1/2024 financial results
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Hannover Rück SE published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 May 2024 10:33:10 UTC.