Download Hannover Life Reassurance Company of America

Hannover Life Reassurance Company of America
Business overview
October 2016
Hannover Re Group
Business overview
Key facts about Hannover Re
Today
Majority shareholder:
50.2% held by Talanx AG*
18 Feb 2004
Second Public Offering
30 Nov 1994
More than 100 subsidiaries, branches and
representative offices on all 5 continents
Total staff of roughly 2,400 employees
Initial Public Offering
1990
Life and health reinsurance
as a strategic growth segment
1966

Foundation by HDI as a subsidiary

Non-life reinsurance
* Majority shareholder with 79.0% is HDI V.a.G.
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More than 5,000 insurance clients in about
150 countries
Our mission: identify risks and assess them correctly
Sustainability at Hannover Re
► Regular
reporting on our sustainability activities
► Cultivation of an open dialogue with major stakeholder groups
Governance and dialogue
► Our
investment policy strives for stable & attractive returns,
while taking ESG criteria into account (e.g. UN Global Compact)
Product responsibility
► Take
Sustainability
Successful employees
Procurement and
environmental protection
concrete steps to foster young talents
► Promotion of a healthy balance between work and leisure
► Definition
of concrete targets and measures to protect climate
► Transparent
communication on donations &
sponsorship activities
Social commitment
2011
2012
2013
Implementation of a sustainability
strategy



4
Implementation of an
Environmental Mgmt System
Certification according to DIN
EN ISO 14001

Regular reporting of our
performance according to
Global Reporting Initiative
Prime rating (C+) according to
oekom research
Financial strength ratings
Group
S&P
A.M. Best
General Reinsurance Corp.
AA+
A++
Hannover Re
AA-
A+
Munich Re
AA-
A+
Swiss Re
AA-
A+
SCOR
AA-
A*
Everest Re
A+
A+
Transatlantic Re
A+
A+
Lloyd's
A+
A
XL Bermuda Ltd.
A+*
A
PartnerRe
A+
A
As at 4 October 2016
* Positive outlook
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Continued growth of both business groups
2015: +18.8%; 5-year CAGR: +8.4%
Gross written premium
in m. EUR
17,069
13,774
11,429
45%
13,963
14,362
45%
12,096
44%
44%
45%
56%
56%
55%
2012
2013
2014
44%
55%
55%
56%
2010
2011
Property & Casualty reinsurance
6
Life & Health reinsurance
2015
We are among the top reinsurers in the world
Premium ranking 2015 in m. USD
Rank Group
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Munich Re
Swiss Re
Hannover Re
SCOR
Lloyd's 2)
Berkshire Hathaway Inc.
RGA
China Re
Everest Re
PartnerRe
Korean Re
Great West Lifeco
Transatlantic Holdings
General Insurance Corporation of India
XL Group
For further information please see A.M. Best “Best’s Special Report” (September 2016)
1) Net premium earned
2) Reinsurance only
n.a. = not available at time of publication
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Country
DE
CH
DE
FR
UK
US
US
CN
BM
BM
KR
CA
US
IN
IE
GWP
NPW
36,976
32,249
18,651
14,665
12,740
12,236
9,371
8,283
5,876
5,548
5,443
4,173
3,662
2,786
2,583
35,2791)
30,442
15,9451)
13,228
10,237
12,236
n.a.
7,546
5,378
5,230
3,739
4,065
3,387
2,474
2,091
Hannover Re is one of the most profitable reinsurers
2011
Company
Hannover Re
Peer 1, Switzerland,
Composite
Peer 5, Bermuda,
Property & Casualty
Peer 9, Bermuda,
Property & Casualty
Peer 2, Germany,
Composite
Peer 7, France,
Composite
Peer 4, US,
Property & Casualty
Peer 8, US,
Life & Health
Peer 6, Bermuda,
Composite
Peer 3, Canada,
Property & Casualty
2012
2013
2014
2011 - 2015
RoE
Rank
RoE
Rank
RoE
Rank
RoE
Rank
RoE
Rank
avg. RoE
Rank
12.8%
1
15.4%
3
15.0%
3
14.7%
4
14.7%
1
14.5%
1
9.6%
3
13.4%
5
13.7%
4
10.5%
8
13.7%
2
12.2%
2
(1.3%)
8
12.9%
6
18.4%
1
16.6%
2
13.0%
3
11.9%
3
(2.4%)
9
15.9%
2
18.0%
2
13.7%
5
9.5%
6
10.9%
4
3.1%
6
12.6%
7
12.5%
5
11.3%
6
10.2%
5
9.9%
5
7.5%
4
9.1%
9
11.2%
6
9.6%
9
10.7%
4
9.6%
6
4.9%
5
15.2%
4
9.4%
8
9.4%
10
7.5%
8
9.3%
7
10.1%
2
9.9%
8
6.5%
9
10.6%
7
7.6%
7
8.9%
8
(7.6%)
10
16.9%
1
9.7%
7
15.3%
3
1.5%
10
7.2%
9
0.5%
7
6.2%
10
(6.7%)
10
18.3%
1
5.7%
9
4.8%
10
List shows the Top 10 of the Global Reinsurance Index (GloRe) with more than 50% reinsurance business
Data based on company data, own calculation
8
2015
Shareholders' equity up by 7%
Higher dividend payment and decreasing OCI offset by strong earnings
Policyholders' surplus
in m. EUR
10,239
8,947
8,768
1,986
2,233
2,238
1,732
682
642
in m. EUR
10,267
1,490
709
7,338
Change in shareholders' equity
702
1,151
337
7,551
(513)
8,068
(457)
636
6,032
5,888
2012
2013
4,971
2011
Shareholders' equity
9
7,551
8,068
2014
2015
Non-controlling interests
Hybrid
Shareholders'
equity
31.12.2014
Net
income
Dividend
payment
Change in
unrealised
gains/losses
Currency
translation
and other
Shareholders'
equity
31.12.2015
We maintained our competitive advantage on admin. expenses
Administrative expense ratio*
3.0%
2.8%
2.8%
2.7%
2.6%
2011
2012
2013
Own calculation
* Administrative expenses + other technical expenses (in % of net premium earned)
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2014
2015
Largely stable asset allocation throughout the quarter
Moderate increase in diversified listed equities
Asset allocation 1)
Investment category
2012
2013
2014
2015
92%
90%
90%
87%
87%
- Governments
19%
19%
21%
26%
27%
- Semi-governments
23%
20%
19%
17%
18%
- Corporates
33%
36%
36%
34%
32%
30%
33%
33%
30%
29%
3%
3%
3%
4%
4%
17%
15%
14%
10%
10%2)2)
2%
2%
2%
3%
4%
<1%
<1%
<1 %
1%
2%
2%
2%
2%
2%
2%
Real estate/real estate funds
2%
4%
4%
4%
4%
Others3)
1%
1%
1%
1%
1%
Short-term investments & cash
3%
4%
4%
5%
5%
Total market values in bn. EUR
32.5
32.2
36.8
39.8
40.3
Fixed-income securities
Investment grade
Non-investment grade3)
- Pfandbriefe, Covered Bonds, ABS
Equities
- Listed Equity
- Private Equity
30.06.2016
1) Economic view based on market values without outstanding commitments for Private Equity and Alternative Real Estate as well as fixed-income investments
of EUR 885.6 m. (EUR 837.1 m.) as at 30 June 2016
2) Of which Pfandbriefe and Covered Bonds = 78.1%
3) Reallocation of High Yield Funds from “Others” to “Corporates – Non-investment grade”
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Solvency II: Hannover Re is prepared to comply
Internal capital model approved by BaFin
Solvency II
Pillar I
Pillar II
Pillar III
Quantitative requirements
 Capital requirements
(SCR/MCR*)
 Own funds (solvency balance
sheet)
 Standard model and internal
model
Qualitative requirements
 Internal controls, risk
management and key functions
 Internal risk assessment
 Supervisory review procedure
Disclosure requirements
 to the regulator and the public
 with the goal of market
transparency and market
discipline
Hannover Re
Hannover Re has received
approval for its partial internal
capital model.
Internal and external risk
quantification is therefore largely
consistent.
Hannover Re has long had in
place an internal control system,
the necessary key functions and
extensive risk management.
Additional requirements arising
out of Solvency II have been
implemented progressively in
recent years.
* SCR = Solvency Capital Requirement; MCR = Minimum Capital Requirement
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We support our clients in their
preparations for Solvency II
through the flexible design of our
products and by sharing
experiences.
Life and health reinsurance
Business overview
Present on all continents
Europe
America
Spain
Madrid
Ireland
Dublin
United Kingdom
London
France
Paris
Germany
Hannover
Italy
Milan
Sweden
Stockholm
Asia
Bahrain
Manama
Canada
Toronto
South Korea
Seoul
USA
Charlotte
Chicago
Denver
New York
Orlando
Japan
Tokyo
Taiwan
Taipei
Bermuda
Hamilton
China
Hong Kong
Shanghai
Mexico
Mexico City
India
Mumbai
Colombia
Bogotá
Brazil
Rio de Janeiro
Property & Casualty reinsurance
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Africa
Australia
South Africa
Johannesburg
Australia
Sydney
Life & Health reinsurance
Malaysia
Kuala Lumpur
Property & Casualty and Life & Health reinsurance
Life and health reinsurance: well diversified portfolio
GWP split by reporting categories
in m. EUR
GWP split by regions
7,731
18%
Morbidity
6,459
6,058
6,145
13%
14%
18%
Mortality
Africa
Latin Germany
3%
3%
America
4%
Other
Europ.
4% 3%
countries
4%
10%
46%
Australia
11%
46%
30%
11%
46%
47%
North
America
28%
12%
Longevity
14%
15%
Financial
solutions
15
15%
16%
22%
19%
25%
25%
20%
17%
2012
2013
2014
2015
United
Kingdom
24%
Asia
17%
2014
2015
We are somewhat different
Life & Health reinsurance

• Rapid decision-making processes
• In-depth knowledge of local markets
Responsive

We are a highly flexible business partner
• Tailor-made services and solutions
• Ability to anticipate market and client demands
Flexible
Our
We are committed to responsiveness and time to market
strategic
contribution
from
L&H

• 900 experts in 19 countries
• Highly empowered staff
Efficient
Undogmatic
We foster an efficient organisational set-up

We have an undogmatic approach
• Entrepreneurial spirit
• Appetite to innovate industry solutions
We offer small company flexibility with a large company balance sheet
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Strategy contribution of the L&H business group
We have ambitious profit and growth targets
Our value proposition to our
customers

Financial solutions
• Tailored reinsurance structures for efficient
capital or liquidity management

Our profit contribution

VNB

EBIT margins
Risk solutions
• Financial solutions/Longevity
≥ 2%
• Competitive terms, capacity and reinsurance
• Mortality/Morbidity
≥ 6%
xRoCA*
≥ 3%
solutions for all types of technical risks

Reinsurance services
• Improvement of sales and underwriting
processes
* xRoCA= eXcess Return on Capital Allocated
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≥ EUR 180 m.

We have well defined reporting categories
Financial solutions
Profitability is less likely to be affected by the
underlying biometric risks
Transactions which include components to provide
alternative means of accessing capital
Risk solutions
Profitability depends largely on the underlying
biometric risks
Mortality
The risk of paying more death benefits than expected
Morbidity
The risk of experiencing a higher claims burden from
traditional health, critical illness, long-term care, and
disability covers
Longevity
The risk of paying annuities and pensions longer than
expected
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Hannover Life Reassurance Company of America
Business overview
Financials and ratings
Hannover Re US
RBC* analysis
in %
2015
RBC ratio based on authorized control level
560.43
Company action level
280.21
Assets and premium
in bn USD
2015
Statutory assets
4.3
Statutory assumed premiums
-3.6
*Risk based capital
Hannover Re US is rated “A+” by A.M. Best and “AA-”by Standard & Poor's
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Leadership in three key business segments
Ties to the five-pillar business model
Mortality solutions
Financial solutions
Traditional mortality risk
Simplified Issue
Monetize value of
in-force blocks
LTC Combo
Strategic financial planning
COLI/BOLI
New business financing
International Life
M&A assistance and ability
to exit non-core businesses
Mortality Consultation &
Underwriting Solutions
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Health and Special Risk
Medicare risk coverage:
Medicare supplement
Med advantage
Part D
Financial Solutions for
our coverages
Specialty covers:
Group life/accident
Dental
Prescription
Key success factors for Hannover Re US

High rating and 50 state licenses

Focused approach only to markets where we add value and deliver excellence

Development of CRM approach already well regarded in industry

Top Tier underwriting, pricing and financial solutions capabilities

Prudent expense structure grounded in proper risk management and growth in
shareholder value

Support and collaboration with global parent, Hannover Re Group

Experienced management with commitment to employee and business excellence
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2015 NMG Survey Results
New Business Relationships
in number of
respondents and %
New Business Clients
80
60
40
31%
34%
20
21.5%
11.6%
6.8%
0
XXX
XXX
XXX
Hannover Re
Total New Business Clients
Clients that view reinsurer as "Most Important"
2015 NMG Survey
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XXX
2015 NMG Survey Results
Likelihood to Recommend - Promoters versus Detractors
in number of
respondents
2013-2015 Promoters
Strongest Promoters
100
Strong Promoters
75
50
25
0
XXX
XXX
XXX
Hannover Re
XXX
XXX
XXX
XXX
in number of
respondents
2013-2015 Neutrals and Detractors
40
XXX
Neutrals
Detractors
30
20
10
0
-10
-20
-30
XXX
2015 NMG Survey
24
XXX
XXX
Hannover Re
XXX
XXX
XXX
XXX
XXX
Risk management framework for Hannover Re US

The overriding goal of our risk management is to protect
Hannover Re US capital and stabilize and optimize
results while adhering to the strategically defined risk
positions for Hannover Re US and the Hannover Re
Group
• Minimum expected returns
• Maximum earnings volatility
Corporate strategy
1. Risk strategy
(appetite)
• Internal control framework integrated into all operations
2. Governance, roles
& responsibilities

Our Risk Framework aligns risk appetite, governance,
policies and reporting to our Corporate Strategy
3. Risk registry
(Identification)

Risk management adds value by bringing transparency
to risk and return trade-offs, and is more than just the
avoidance of losses in any given year’s earnings
4. Limits, thresholds
& policies

Our Solvency II strategy is to be a stable and low risk
counterparty and leverage our internal capital model
expertise for multiple internal and external uses
• High standards for economic and regulatory capital
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5. Risk, reporting
& monitoring
Hannover Re US
Key contacts
Peter Schaefer
President & CEO
Jeff Burt
Executive Vice President
Financial Solutions
Steve Najjar
Executive Vice President
and General Counsel,
Health and Special Risk
Chris Shanahan
David Wheat
Curt Hagelman
Executive Vice President
Mortality Solutions
Executive Vice President
Chief Financial Officer
Senior Vice President
Corporate Marketing
Additional Hannover Re US contacts can be found at www.hannover-re.com/#/overlay/131550?firstLevel=131603
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Disclaimer
This presentation does not address the investment objectives or financial situation of any particular person or
legal entity. Investors should seek independent professional advice and perform their own analysis regarding
the appropriateness of investing in any of our securities.
While Hannover Re has endeavoured to include in this presentation information it believes to be reliable,
complete and up-to-date, the company does not make any representation or warranty, express or implied,
as to the accuracy, completeness or updated status of such information.
Some of the statements in this presentation may be forward-looking statements or statements of future
expectations based on currently available information. Such statements naturally are subject to risks and
uncertainties. Factors such as the development of general economic conditions, future market conditions,
unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the
actual events or results to be materially different from those anticipated by such statements.
This presentation serves information purposes only and does not constitute or form part of an offer
or solicitation to acquire, subscribe to or dispose of, any of the securities of Hannover Re.
© Hannover Rück SE. All rights reserved.
Hannover Re is the registered service mark of Hannover Rück SE.
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