UK Markets closed

HANNOVER RUECK SE HANNOVER RUEC (0M9A.IL)

IOB - IOB Delayed price. Currency in EUR
Add to watchlist
138.95-0.70 (-0.50%)
At close: 5:15PM GMT
Full screen
Previous close139.65
Open138.70
Bid137.50 x 0
Ask140.40 x 0
Day's range138.10 - 139.00
52-week range3.02 - 192.60
Volume4,185
Avg. volume29,060
Market capN/A
Beta (5Y monthly)N/A
PE ratio (TTM)N/A
EPS (TTM)N/A
Earnings dateN/A
Forward dividend & yieldN/A (N/A)
Ex-dividend dateN/A
1y target estN/A
  • EQS Group

    Hannover Re expects Group net income of more than EUR 800 million for the 2020 financial year

    DGAP-News: Hannover Rück SE / Key word(s): Interim Report/Results Forecast04.11.2020 / 07:30 The issuer is solely responsible for the content of this announcement.Corporate newsHannover Re expects Group net income of more than EUR 800 million for the 2020 financial year Gross premium up by 12.3% in the first nine months adjusted for exchange rate effects Shareholders' equity rises by 2.8% to EUR 10.8 billion Return on equity reaches 8.3% Additional reserves for Covid-19 in the third quarter in line with expectations Group net income of EUR 667.8 million lower than the previous year due to Covid-19 reserves Group earnings guidance of more than EUR 800 million for 2020 Outlook for 2021: Group net income in the range of EUR 1.15 billion to EUR 1.25 billion Hannover, 4 November 2020: Hannover Re expects Group net income of more than EUR 800 million for the 2020 financial year. The company increased its reserves for Covid-19-related losses in property and casualty reinsurance by EUR 100 million to a total amount of EUR 700 million as at the end of September. In life and health reinsurance the burden from Covid-19 currently stands at EUR 160 million."The impacts associated with the Covid-19 pandemic can be better estimated following the close of the third quarter, and we therefore believe that we are now in a position again to provide profit guidance for 2020 and 2021," Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re, said. "While we feel very comfortable with our 2020 guidance based on our prudent reserving, the outlook for the coming year is dependent on the further course of the pandemic. Movements in reinsurance prices nevertheless give us grounds for optimism."Group net income after nine months reaches EUR 667.8 million The gross written premium for the Group increased by 10.9% as at 30 September 2020 to EUR 19.3 billion (EUR 17.4 billion). Growth would have come in at 12.3% at constant exchange rates. Net premium earned climbed by 9.6% to EUR 15.8 billion (EUR 14.4 billion), equivalent to 11.1% adjusted for exchange rate effects.The operating profit (EBIT) was down 35.3% from the previous year's level at EUR 902.9 million (EUR 1,395.4 million). Group net income contracted by 33.4% to EUR 667.8 million (EUR 1,003.2 million). Earnings per share reached EUR 5.54 (EUR 8.32).The capital adequacy ratio, which measures Hannover Re's risk-carrying capacity, stood at 222% as at the end of September. This level is comfortably above the internal limit of 180% and the threshold of 200%.Property and casualty reinsurance:Major loss expenditure exceeds budgeted amount In property and casualty reinsurance the impacts of the Covid-19 pandemic can now be considerably better estimated - at least as far as the current year is concerned. Furthermore, an increasing and sustained improvement in prices and conditions for insurers and reinsurers alike was evident in the various rounds of renewals held during the year on account of the strains associated with the pandemic, large losses and the low interest rate environment.Gross written premium in property and casualty reinsurance grew by 14.5% to EUR 13.3 billion (EUR 11.7 billion). At constant exchange rates, the increase would have been 15.9%. Net premium earned climbed by 13.2% to EUR 10.5 billion (EUR 9.3 billion); growth would have reached 14.7% adjusted for exchange rates.Net major loss expenditure in the first nine months came to EUR 1.1 billion. Of this total amount, EUR 700 million was attributable to Covid-19-related impacts. The largest net losses in the third quarter - aside from the pandemic - included a derecho storm in the United States costing EUR 83.9 million, Hurricane Laura in the US at EUR 64.4 million and the explosion at the Port of Beirut in an amount of EUR 67.4 million.The combined ratio in property and casualty reinsurance consequently came in at 101.4% (98.6%). Stripping out the loss reserves relating to Covid-19 and making allowance for large loss expenditure in line with expectations, the combined ratio would have amounted to 97.6%.The operating profit (EBIT) in property and casualty reinsurance declined by 36.0% to EUR 588.5 million (EUR 919.0 million). The contribution made by property and casualty reinsurance to Group net income fell by 34.7% to EUR 418.2 million (EUR 640.1 million).Life and health reinsurance:Strains from Covid-19 totalling EUR 160 million In life and health reinsurance the total burden associated with the Covid-19 pandemic as at the end of September came to EUR 160 million, with concrete loss advices amounting to EUR 91 million. The bulk of this was attributable to payments for illnesses and deaths in the United States."The increase in the reserves set aside for Covid-19 in life and health reinsurance reflects our conservative reserving policy in response to the global spread of infection," explained Jean-Jacques Henchoz. "Thanks to the successful remediation of our legacy US mortality book in the previous year, we can be highly satisfied with the performance of the business group despite the sharply increased risk provision."Gross written premium in life and health reinsurance rose by 3.6% as at the end of September to EUR 5.9 billion (EUR 5.7 billion); growth would have reached 5.0% adjusted for exchange rate effects. The main driver here was sustained vigorous growth in Asia and Australia. Net premium earned climbed to EUR 5.3 billion (EUR 5.1 billion). Growth of 4.4% would have been recorded at constant exchange rates.After the previous year's result in life and health reinsurance had also been significantly boosted by one-time income on the investment side, the operating result (EBIT) retreated by 34.0% as at the end of September to EUR 315.5 million (EUR 477.7 million). The contribution made by life and health reinsurance to Group net income contracted by 26.4% to EUR 296.6 million (EUR 402.9 million).Investments:Return on investment reaches 2.8%The portfolio of assets under own management increased to EUR 49.0 billion (31 December 2019: EUR 47.6 billion). Ordinary investment income excluding interest on funds withheld and contract deposits fell by 11.5% to EUR 919.4 million (EUR 1,039.3 million). Altogether, Hannover Re generated investment income of EUR 1,185.0 million (EUR 1,331.9 million). The annualised average return reached 2.8%.Shareholders' equity:Shareholders' equity rises by 2.8% to EUR 10.8 billionThe shareholders' equity of Hannover Re increased by 2.8% as at 30 September 2020 to EUR 10.8 billion (31 December 2019: EUR 10.5 billion). The book value per share thus reached EUR 89.74 (31 December 2019: EUR 87.30). The annualised return on equity amounted to 8.3% as at 30 September 2020 (31 December 2019: 13.3%).Guidance 2020:New guidance for Group net income of more than EUR 800 million Based on available loss estimates for Covid-19, Hannover Re expects Group net income of more than EUR 800 million for the current year. The return on investment should be around 2.7% and gross written premium for the Group should show growth in the high single-digit percentage range adjusted for exchange rate effects.In recent rounds of renewals held in property and casualty reinsurance Hannover Re was able to benefit from stronger demand for high-quality reinsurance protection at improved prices and conditions. Coming on the back of a protracted soft market phase, this trend reversal is likely to continue both in primary business and on the reinsurance side.For the renewals as at 1 January 2021 in property and casualty reinsurance Hannover Re therefore expects to book increased premium income and higher prices.Regarding the dividend for the 2020 financial year, Hannover Re anticipates an ordinary dividend on the previous year's level of EUR 4.00 per share. Payment of a special dividend is dependent on the business opportunities emerging in the short-term and corresponding capital requirements, especially those arising out of the expected improvements in rates and conditions in the property and casualty reinsurance renewals as at 1 January 2021.Outlook for 2021:Group net income of EUR 1.15 billion to EUR 1.25 billion "The Covid-19 pandemic will continue to be a concern for us in the year ahead", said Jean-Jacques Henchoz. "That said, we already have a clearer picture of the situation now and we feel conservatively enough positioned in our assessment that we can anticipate Group net income in the range of EUR 1.15 billion to EUR 1.25 billion in the coming year. That also puts the good result of 2019 back in reach."In addition, Hannover Re expects to generate a return on investment of roughly 2.4% and growth in Group gross premium - adjusted for exchange rate effects - of around 5% in the coming year.The expectations for 2021 also reflect an increased net major loss budget of EUR 1.1 billion (EUR 975 million). The adjustment is prompted first and foremost by further growth in the underlying business. As usual, all statements regarding future targets are subject to the premise that major loss expenditure remains within the budgeted level and that there are no unforeseen distortions on capital markets.Hannover Re's dividend policy remains unchanged for the coming financial year. The company envisages a payout ratio for the ordinary dividend in the range of 35% to 45% of its IFRS Group net income. The ordinary dividend will be supplemented by payment of a special dividend subject to a comfortable level of capitalisation and Group net income in line with expectations.Hannover Re, with gross premium of more than EUR 22 billion, is the third-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with more than 3,000 staff. Established in 1966, the Hannover Re Group today has a network of more than 150 subsidiaries, branches and representative offices worldwide. The Group's German business is written by the subsidiary E+S Rück. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior".Please note the disclaimer:https://www.hannover-re.com/535917 Key figures of the Hannover Re Group (IFRS basis) in EUR million Q1-3/2020 +/- previous year Q1-3/2019 2019 Hannover Re Group         Gross written premium 19,294.9 +10.9% 17,393.5   Net premium earned 15,771.7 +9.6% 14,391.4   Net underwriting result1) (439.2)   (33.4)   Net investment income 1,185.0 -11.0% 1,331.9   Operating profit (EBIT) 902.9 -35.3% 1,395.4   Group net income 667.8 -33.4% 1,003.2   Earnings per share in EUR 5.54 -33.4% 8.32   Retention 90.1%   90.5%   Tax ratio 17.1%   20.0%   EBIT margin2) 5.7%   9.7%   Return on equity 8.3%   13.7% 13.3%           in EUR million Q1-3/2020 +/- previous year Q1-3/2019 2019 Policyholders' surplus 13,874.0 +2.1%   13,588.9 Investments (excl. funds held by ceding companies) 48,974.7 +2.8%   47,629.4 Total assets 72,794.6 +2.0%   71,356.4 Book value per share in EUR 89.74 +2.8%   87.30           Property & Casualty reinsurance         in EUR million Q1-3/2020 +/- previous year Q1-3/2019 2019 Gross written premium 13,347.6 +14.5% 11,653.3   Net premium earned 10,512.0 +13.2% 9,282.3   Net underwriting result1) (145.8) -216.2% 125.4   Operating profit (EBIT) 588.5 -36.0% 919.0   Group net income 418.2 -34.7% 640.1   Retention 90.3%   90.8%   Combined Ratio1) 101.4%   98.6%   EBIT margin2) 5.6%   9.9%             Life & Health reinsurance         in EUR million Q1-3/2020 +/- previous year Q1-3/2019 2019 Gross written premium 5,947.3 +3.6% 5,740.1   Net premium earned 5,259.4 +2.9% 5,108.9   Operating profit (EBIT) 315.5 -34.0% 477.7   Group net income 296.6 -26.4% 402.9   Retention 89.5%   89.9%   EBIT margin2) 6.0%   9.4%             1) Including funds withheld         2) Operating result (EBIT)/net premium earned                 Key figures of the Hannover Re Group (IFRS basis) in EUR million Q3/2020 +/- previous year Q3/2019 Hannover Re Group       Gross written premium 6,148.8 +7.9% 5,699.5 Net premium earned 5,393.6 +7.1% 5,035.6 Net underwriting result1) (108.9) +19.7% (91.0) Net investment income 391.9 -15.9% 466.3 Operating profit (EBIT) 399.3 -11.9% 453.3 Group net income 265.5 -22.1% 340.7 Earnings per share in EUR 2.20 -22.1% 2.82 Retention 88.6%   90.2% Tax ratio 24.1%   13.8% EBIT margin2) 7.4%   9.0% Return on equity 9.9%   13.3%         Property & Casualty reinsurance       in EUR million Q3/2020 +/- previous year Q3/2019 Gross written premium 4,173.4 +9.7% 3,805.9 Net premium earned 3,643.0 +9.8% 3,318.5 Net underwriting result1) 14.9 -121.2% (70.5) Operating profit (EBIT) 298.5 +13.9% 262.1 Group net income 173.4 -16.9% 208.7 Retention 88.0%   89.4% Combined Ratio1) 99.6%   102.1% EBIT margin2) 8.2%   7.9%         Life & Health reinsurance       in EUR million Q3/2020 +/- previous year Q3/2019 Gross written premium 1,975.4 +4.3% 1,893.6 Net premium earned 1,750.5 +1.9% 1,717.1 Operating profit (EBIT) 101.3 -47.2% 191.7 Group net income 108.2 -25.5% 145.2 Retention 89.9%   91.8% EBIT margin2) 5.8%   11.2%         1) Including funds withheld       2) Operating result (EBIT)/net premium earned      ContactCorporate Communications:Karl Steinle tel. +49 511 5604-1500 karl.steinle@hannover-re.comMedia Relations: Oliver Suesstel. +49 511 5604-1502oliver.suess@hannover-re.comInvestor Relations: Axel Bock tel. +49 511 5604-1736axel.bock@hannover-re.com www.hannover-re.com 04.11.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de Language: English Company: Hannover Rück SE Karl-Wiechert-Allee 50 30625 Hannover Germany Phone: +49-(0)511-5604-1500 Fax: +49-(0)511-5604-1648 Internet: www.hannover-re.com ISIN: DE0008402215 WKN: 840 221 Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange EQS News ID: 1145195   End of News DGAP News Service

  • EQS Group

    E+S Rück expects rising prices and improved conditions in 2021 for property and casualty reinsurance in Germany

    DGAP-News: Hannover Rück SE / Key word(s): Miscellaneous19.10.2020 / 07:30 The issuer is solely responsible for the content of this announcement.Corporate newsE+S Rück expects rising prices and improved conditions in 2021 for property and casualty reinsurance in Germany Covid-19-related losses and intensification of the low interest rate environment are supporting trend reversal towards higher prices in primary insurance and reinsurance Contraction in worldwide reinsurance capacities also making itself felt on the German market Demand for high-quality protection from financially robust reinsurers continues to grow Hannover, 19 October 2020: E+S Rückversicherung AG - the Hannover Re subsidiary responsible for the Group's German business - expects rising prices and improved conditions overall for the coming year in property and casualty reinsurance on the German market. Demand for reinsurance coverage from financially robust providers will continue to grow against the backdrop of the Covid-19 pandemic."Along with the direct impacts of the pandemic, the renewed decline in interest rates is taking a toll on insurance industry profits. Price increases at primary insurers are therefore absolutely essential and adjustments are also needed on the reinsurance side," noted Dr. Michael Pickel, Chief Executive Officer of E+S Rück. "During the Covid-19 pandemic, as always, we are a reliable partner at our customers' side and we help them to shoulder the associated challenges. This includes not only providing traditional reinsurance but also assisting with claims management, offering tailored solutions for solvency relief and jointly developing new coverage concepts."With an eye to future pandemic covers, it has become evident that the enormous costs associated with the global spread of diseases such as Covid-19 can only be borne by the insurance industry to a very limited extent overall. E+S Rück supports partnership-based solutions with the participation of public and private actors for the coverage of systemic risks such as pandemics.It can therefore be anticipated that primary insurers and reinsurers alike will define the coverage of pandemics more clearly in their new contracts. In this regard E+S Rück assists its customers with the necessary adjustments and the future handling of pandemic exposures such as those under business closure insurance.The impacts of the Covid-19 pandemic are especially burdensome for small and mid-sized enterprises. Business closure insurance, in particular, has recorded numerous claim notifications. The picture is similar in event cancellation insurance, albeit to a less marked extent so far.Claim numbers in motor insurance have been lower in the current year to date owing to the fact that traffic volumes were down for a while. This is, however, likely to remain a one-time effect. A reduction in insured risks has also been observed in fleet business. Claims expenditure is expected to normalise for 2021. The rising cost of spare parts and repairs continues unchanged.In response to growing demand in the market for telematics tariffs, E+S Rück offers its customers a telematics solution - es|Tmatik - with its own rating basis. This solution is now undergoing a second test phase. Interest in this tool among insurers is brisk and three companies are currently working to roll out their own telematics tariff based on es|Tmatik.In the German market for natural catastrophe risks it is to be anticipated that reinsurance prices will improve overall on account of catastrophe losses around the world and reduced reinsurance capacity against the backdrop of what has so far tended to be an average regional loss burden. This is especially true of loss-affected programmes.In industrial and commercial business the line of industrial fire insurance has for the most part been loss-making in recent years. While the remediation efforts undertaken by primary insurers are starting to make themselves felt, the economic downturn triggered by the Covid-19 pandemic is nevertheless having a clearly negative impact.Taken together with the effects of business closures and slumps in demand, the need for remediation in commercial and industrial property lines therefore continues to grow more pressing.Business closure insurance plays a major role as supplementary coverage, for example in the case of hospitals, care homes, medical practices, hotels or restaurants.For the coming year E+S Rück anticipates improved conditions on the whole in the reinsurance market for commercial and industrial risks, especially under loss-affected programmes.The Covid-19 pandemic and legal disputes arising in this connection are again leading to substantial claims expenditures under legal protection insurance. The trend towards an uptick in demand for reinsurance covers - which could already be discerned in the previous year - is therefore likely to be sustained.All in all, E+S Rück anticipates further attractive business opportunities in Germany for 2021. Direct contact with the customer and close, partnership-based cooperation are absolutely indispensable for E+S Rück - even bearing in mind the pandemic and the associated restrictions on physical interaction needed to contain it."Particularly in times of crisis, we attach special priority to personal exchanges and we welcome every opportunity to meet, insofar as this is currently possible and justifiable while respecting all safety precautions," explained Dr. Michael Pickel. "Through a wide range of virtual formats we are able to maintain intensive contact with the customer and always stay close at hand despite physical distancing."Hannover Re, with gross premium of more than EUR 22 billion, is the third-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with more than 3,000 staff. Established in 1966, the Hannover Re Group today has a network of more than 150 subsidiaries, branches and representative offices worldwide. The Group's German business is written by the subsidiary E+S Rück. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior".Please note the disclaimer:https://www.hannover-re.com/535917   Contact Corporate Communications: Karl Steinle tel. +49 511 5604-1500 karl.steinle@hannover-re.com Media Relations: Oliver Suess tel. +49 511 5604-1502 oliver.suess@hannover-re.com Investor Relations: Axel Bock tel. +49 511 5604-1736 axel.bock@hannover-re.com www.hannover-re.com 19.10.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de Language: English Company: Hannover Rück SE Karl-Wiechert-Allee 50 30625 Hannover Germany Phone: +49-(0)511-5604-1500 Fax: +49-(0)511-5604-1648 Internet: www.hannover-re.com ISIN: DE0008402215 WKN: 840 221 Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange EQS News ID: 1141397   End of News DGAP News Service

  • EQS Group

    Hannover Re anticipates significant price increases in property and casualty reinsurance

    DGAP-News: Hannover Rück SE / Key word(s): Miscellaneous 14.09.2020 / 07:30 The issuer is solely responsible for the content of this announcement. Corporate newsHannover Re anticipates significant price increases in property and casualty reinsurance * Insurers and reinsurers under strain from low interest rate environment, large losses and Covid-19 pandemic * Rising demand for coverage from financially robust reinsurers * Market environment supports already discernible trend reversal towards higher prices * Hannover Re sees profitable growth opportunities across a broad front Hannover, 14 September 2020: Hannover Re expects to see significant price increases spanning the various lines of property and casualty reinsurance in the treaty renewals as at 1 January 2021. The key drivers here are the strains incurred by primary insurers and reinsurers in connection with the Covid-19 pandemic, a further drop in interest rate levels and the large losses recorded over the past three years. "Our sympathies go out to everyone who has lost family or friends or been impacted by the virus in any other way," Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re, said. "We stand shoulder-to-shoulder with our customers and emphasise sustained, partnership-based relationships. Our business model and our capital resources are geared to managing extreme scenarios. Low interest rates are here to stay for a long time. This necessitates considerable pricing discipline, because technical profitability will have to do even more to offset declines in investment income. With this in mind, price increases on both the insurance and reinsurance side are absolutely essential in January and beyond."Along with generally stronger demand for high-quality reinsurance protection, primary insurers are increasingly seeking tailor-made solutions offering solvency relief. This is where first and foremost reinsurers with a particularly large risk-carrying capacity and above-average ratings have a pivotal role to play.In the various rounds of renewals held during 2020 Hannover Re secured improved conditions and price increases in some areas. Particularly for treaties that had suffered losses, price increases mostly running into double-digit percentages were obtained. Owing to the low level of interest rates, however, these are not always technically adequate and further price increases are therefore needed. The effects of the Covid-19 pandemic on worldwide reinsurance markets vary in scale from region to region. The largest losses to date are anticipated from covers in the areas of business interruption, trade credit and event cancellation, although the spectrum of possible scenarios remains too broad for concrete forecasts. A further consideration is that many government assistance programmes are limited in duration. Against this backdrop, the level of risk awareness among primary insurers and hence the importance attached to high-quality risk protection have risen sharply over the past few months.Specifically, Hannover Re anticipates the following developments in the treaty renewals as at 1 January 2021: Europe Business in Germany has been significantly shaped by Covid-19, among other factors, over the course of the year. The measures implemented to contain the pandemic and their impacts on many companies' operations have been felt particularly acutely among small and mid-sized enterprises (SMEs). Appreciable losses have been seen here in business closure insurance. This is similarly true, albeit to a less marked extent, of event cancellation insurance.For 2021 Hannover Re anticipates sharply lower growth in the primary insurance market compared to prior years. The repercussions of the pandemic-induced economic downturn will be felt especially keenly in the SME segment. On the other hand, the effects on business with private customers should be more limited in scope.The need for remediation in commercial and industrial property lines continues to grow more pressing on account of the burden of losses. Reinsurance conditions are expected to improve, particularly under loss-affected programmes.Overall, the consequences of a pandemic - which constitutes a systemic risk - can be borne only to a very limited extent by the insurance industry. Clarifications or exclusions in relation to coverage for the pandemic risk have therefore been adopted both in the primary insurance market and in the reinsurance market.Motor insurance appears set to enjoy some relief in the current year due to the temporary reduction in traffic volumes and correspondingly lower losses. Given that this is rather a one-time effect and 2021 is likely to see normalised loss expenditure with continued rising costs for spare parts and repairs, insurers and reinsurers alike have little margin for further improvements in conditions.In the United Kingdom and Ireland appreciable market hardening can be observed among primary insurers.Lloyd's of London continues to adopt a more restrictive approach for selected lines as well as for syndicates that do not deliver profitable results. This, in turn, has led to an ongoing supply shortage. Most notably, the market for contingency covers is showing significant rate increases despite pandemic exclusions. Driven by, among other things, the uncertainty surrounding the scale of Covid-19 losses, liability business is also seeing sharp reactions on the pricing side and improved conditions. The international property business written by Lloyd's syndicates had already recorded price increases in recent years on the back of worldwide natural catastrophe losses. This trend is continuing and is additionally being driven by current issues surrounding the coverage of Covid-19 losses as a consequence of business interruption without associated property damage.These changes in the original business are analogously reflected - and sometimes even more accentuated - in the book of non-proportional reinsurance written by Hannover Re.UK motor business, which Hannover Re writes on a non-proportional basis, has seen substantial price increases. Last year's adjustment to the Ogden rates, which fell short of the expectations of insurers and reinsurers, triggered price corrections. Significant price increases are similarly anticipated for UK motor business in the coming year.Based on its good business relationships with long-standing customers, Hannover Re is able to defend its market position and is enjoying very healthy demand.In France price increases are to be anticipated on the primary insurance side. This can be attributed, among other things, to the continued decline in income from investments as well as the sustained level of claims expenditure. At the same time, rising demand for industrial insurance covers is a further supportive factor. This should also have positive implications for movements in reinsurance prices, not least in view of the additional strain here from large losses in prior years caused by run-off results that fell short of expectations.In the markets of Central and Eastern Europe the Covid-19 pandemic has, as in many other regions, had an added adverse impact on what was already a challenging economic situation, even though no or only minimal Covid-19-related losses are to be expected from this region. Price increases can be anticipated under loss-affected treaties and for programmes that were not adequately priced to reflect the risks. Over the medium to long term Hannover Re is looking for the economy here to bounce back and for stronger growth rates in primary business so as to close the protection gap.North America The primary insurance market in North America continues to develop favourably, notwithstanding the uncertainties associated with Covid-19 and the resulting economic constraints. All lines of business with the exception of workers' compensation are showing appreciable rate increases. The damage inflicted by tornados, hailstorms and hurricanes in the course of the year has led to a relatively large number of claims. Following on from the fire losses seen in California in recent years, this means that other parts of North America will see adjustments to rates and conditions.The challenges associated with the Covid-19 crisis - when it comes to scope of coverage and the potential losses from various lines of business - have prompted many primary insurance customers to take a closer look at the financial strength of their reinsurance partners. A clear focus on excellent capital resources and long-term reinsurance relationships can be observed. Appreciable price increases or more precisely defined coverage restrictions are the norm in both the property and liability lines.Latin America The growth trend in demand for primary insurance covers in Central and South America is set to continue, even against the backdrop of the current pandemic. Natural catastrophe risks and social unrest have caused a surge in demand for high-quality risk protection in Latin America. The underlying growth in some countries combined with the withdrawal of other market players is currently leading to harder insurance and reinsurance conditions. Individual markets in Latin America continue to see brisk growth in demand for insurance products, especially in areas associated with coverage for motor vehicles, production facilities and real estate. Hannover Re is similarly recording sustained strong interest in the development of coverage concepts based on parametric indices. Most recently, for example, the company supported coverage for coral reefs in Mexico in partnership with Global Parametrics. Parametric covers are especially suited to countries with a low insurance density. Governments are able to improve protection for their population against catastrophic events with the aid of these solutions. Asia-Pacific The APAC region is the highest-growth economic region in the world and it is evolving into one of the largest global insurance markets. This growth holds the promise of further significant business opportunities, in part because the insurance density here is still lower than in more mature markets. Not only in property and casualty reinsurance but also in the health and provision sector appreciable growth rates can be anticipated over the medium to long term, which will also benefit reinsurers.Hannover Re has continuously grown its footprint in the region in recent years and now has an efficient network of local subsidiaries, branches and representative offices. It is thus already very well placed to take advantage of business opportunities and to further extend and reinforce its market positioning through targeted measures in specific subsegments.In this growth region Hannover Re supports its customers in their development and in facing up to the challenges of the coming years, whether through concepts designed to provide capital relief or by optimising the distribution and structuring of their products. In part with an eye to the increasing urban densification of Asia's metropolitan centres, it is imperative to design suitable insurance solutions as protection against natural disasters and to further boost insurance density. Narrowing these protection gaps opens up opportunities for insurers and reinsurers alike to underscore their social relevance.Furthermore, Hannover Re has launched a strategic initiative intended to maximise even more intensively the growth potential offered by its business in the APAC region.Hannover Re is looking ahead with optimism to the upcoming renewals as at 1 January 2021 and 1 April 2021 in the Asia-Pacific markets, even though price movements will likely vary from region to region depending on the burden of losses. The impacts of the Covid-19 pandemic must be kept in mind here as an element of uncertainty. Natural catastrophe business The reinsurance market has experienced three successive years of major natural catastrophe losses from 2017 through 2019. This has impacted both traditional reinsurers as well as capacity providers from the ILS market. Despite the absence of sizeable natural catastrophe losses in the first half of 2020 the global impact of the Covid-19 pandemic is adding further challenges to an already distressed reinsurance market. When it comes to property catastrophe business, this has resulted in an overall favourable trading environment for reinsurers throughout all renewals in 2020 so far. Pricing momentum was particularly pronounced in territories and programmes that had sustained significant losses recently such as the US, Japan and the Caribbean.Going into 2021, Hannover Re anticipates the following developments in individual markets for natural catastrophe risks - based on the assumption of no further market-changing events:North America: Overall, rates for US property catastrophe business have reached a satisfactory level. However, since the US is the peak zone for most reinsurers Hannover Re expects continued upward pressure on rates, particularly for loss-impacted programmes. The combination of losses and restricted capacities brought the market as a whole to a price inflection point in 2019. The environment is expected to show further improvement in 2021.Europe: In 2020 Hannover Re noted a stable rating environment and in some instances improved pricing. With Europe currently being a centrepoint of the Covid-19 impact on the insurance and reinsurance market, material hardening is expected for 2021, particularly for those accounts that sustain significant losses from the pandemic. Japan: Following the severe typhoons of 2018 and 2019 Hannover Re had already achieved significant price increases for Japanese wind and flood catastrophe reinsurance programmes in the 1 April 2020 renewals. Major reinsurers have used the recent events to update their risk models and hence their view of the Japanese typhoon risk and associated exposures. This is expected to lead to further substantial price increases in 2021 and should help bring about technical adequacy, the fundamental basis for reinsurers' long-term support for this market.Australia/New Zealand: With significant and repeated frequency losses in Australia in the last couple of years, there was considerable pressure to generate prices commensurate with the risks in order to improve terms in 2020, especially for aggregate covers and lower programme layers. For 2021 Hannover Re expects this trend to continue for all natural catastrophe covers. Specialty lines Activities in the global aviation sector have been heavily impacted by Covid-19, as reflected in a significant slump in passenger numbers. These developments also have implications for the associated insurance market. It should, however, be borne in mind here that part of the premium contraction is offset by the fact that the trend towards rising rates - which was already observed in previous years - has continued undiminished and even gained added impetus in some areas.Hannover Re has consistently succeeded in improving treaty conditions in proportional business to its advantage and in substantially raising premiums for non-proportional reinsurance solutions. Despite this favourable development, it is nevertheless important to remember that the reinsurance market is only at the beginning of a correction phase - which is why Hannover Re is maintaining unchanged its disciplined underwriting approach geared to the long term.The marine market suffered a sizeable number of frequency losses in 2019. Reflecting also the poor results of prior years, this development created a further need for insurers to raise prices. This trend gained added momentum in the first half of 2020 owing to the effects of Covid-19.An appreciable hardening of the reinsurance market was already perceptible in the renewals during the year.Rates in the offshore energy line remain stable on both the insurance and reinsurance side. This is particularly noteworthy against the backdrop of declining volume flows, attributable to reduced air and maritime traffic in connection with the Covid-19 crisis, as well as the absence of large loss events. Hannover Re is seeing stronger interest among its customers in becoming more heavily involved in insurance solutions for renewable energies and in purchasing specific reinsurance covers for this purpose.For the 2021 round of renewals Hannover Re anticipates stable reinsurance conditions and an improved pricing structure.Despite the worldwide recession, merely modest rises in loss ratios compared to previous years have been recorded in credit and surety insurance as well as in the area of political risks. Increased loss expenditure must nevertheless be anticipated over the coming months on account of the general state of the economy. With this mind, prices in primary insurance and reinsurance should move appreciably higher.In the area of agricultural risks the growing need for agricultural commodities and foodstuffs as well as the increased prevalence of extreme weather events continue to stimulate greater demand for appropriate reinsurance solutions, especially in emerging and developing countries. Hannover Re's involvement here encompasses not only traditional reinsurance but increasingly also cooperation with customers and various partners on the development of innovative insurance tools. Potential areas for growth include index-based products and parametric covers as well as public-private partnerships.The market for insurance-linked securities (ILS) has contracted over the past two years by around 10% to a volume of currently roughly USD 90 billion. This decline can be attributed to dissatisfaction with the results and to trapped collateral for possible negative loss run-offs that at least temporarily is unavailable for new investments. Just as in the reinsurance market, conditions are improving and new record highs can be expected in the medium term.Hannover Re accesses the ILS market both to obtain protection for its own catastrophe risks and to transfer its clients' life & health and property & casualty risks to the capital market. The latter primarily takes the form of collateralised reinsurance, which is still the largest business segment within Hannover Re's ILS activities, but is also supplemented by the issuance of catastrophe bonds.In 2020, for example, Hannover Re has so far brought five catastrophe bonds to the capital market for US clients with a total volume of around USD 1.2 billion. Over the coming years the company expects demand to show moderate growth overall. Hannover Re is also itself an investor in catastrophe bonds, thereby maximising all the opportunities offered by the ILS market.Business in the area of structured reinsurance continues to develop in line with expectations in the current year. Going forward, too, Hannover Re expects to see further growth in demand for innovative and tailor-made reinsurance solutions.In this context new business opportunities are opening up first and foremost in North America, Europe and Asia. The purchasing habits of many clients have changed in recent years, reflecting a move towards holistic reinsurance solutions. This trend shows no sign of abating, with more and more customers seeking structured reinsurance solutions. The exceptional market circumstances associated with the Covid-19 pandemic are supporting a further shift towards a provider's market in this segment on a virtually global basis.The planned implementation of IFRS 17 will cause demand for bespoke reinsurance solutions to trend higher, driven by the further increase in the complexity of capital and risk management faced by customers.Outlook For both insurers and reinsurers, 2020 remains dominated by the ongoing Covid-19 pandemic and the associated losses as well as by the sustained low interest rate environment and resulting impacts on profits. In both the primary and the reinsurance market, therefore, technical profitability will move centre stage on a lasting basis - also with a view to preserving the industry's future risk-bearing capacity. Against this backdrop, rate increases are absolutely essential."From our perspective, Covid-19 is a market-changing event that can be compared with the terrorist attacks of 11 September 2001 or hurricanes Katrina, Rita and Wilma in 2005," Sven Althoff, a member of Hannover Re's Executive Board responsible for property and casualty reinsurance, commented. "The true scale of the losses caused by the pandemic will only become clear over the long term. We see the Covid-19 pandemic as a catalyst for fundamental adjustments to prices and conditions at insurers and reinsurers alike. Just how these manifest themselves will, however, vary by region and line of business."It is Hannover Re's expectation that the growing momentum of the price increases recorded in past rounds of treaty renewals will be sustained in the year ahead. Sharply rising prices across the various segments can be expected as at 1 January 2021. Appreciable improvements in conditions are similarly likely in view of the effects of the pandemic and the associated considerable uncertainties."The Covid-19 pandemic confronts us with a systemic, worldwide risk. Simply given its capital resources, the insurance industry alone cannot shoulder such an accumulation risk," Jean-Jacques Henchoz said. "Partnership-based approaches between governments and the insurance sector are needed to create promising solutions for the coverage of systemic risks such as cyber attacks or pandemics. We are optimally placed to support the development and realisation of such coverage concepts and hence to ensure that a larger share of the costs resulting from future pandemics are covered at premiums commensurate with the risk."Due to the restrictions on physical contact adopted to contain the pandemic, digital working has gained in acceptance and significance. Cyber covers, digital services and products will therefore continue to make headway and innovative insurtechs will enjoy a surge in demand. In this context, Hannover Re is committed to partnership-based cooperation with its clients on the development of digital solutions as well as to supporting insurtechs with know-how and reinsurance backing.In the second half of the year, a series of major loss events has occurred. The massive explosion in the port of the Lebanese capital Beirut at the beginning of August claimed numerous lives and caused severe devastation. Together with losses from natural catastrophes in the United States and Asia, large loss expenditure for the third quarter (excluding Covid-19) is therefore likely to remain at the anticipated level.Bearing in mind the continuing considerable uncertainty surrounding the further course of the Covid-19 pandemic and the mechanisms through which government support measures make themselves felt, it is too early to provide any reliable profit guidance for the Group. Nor is it possible yet to precisely quantify the concrete effects of the pandemic on reinsurance markets and investments. Hannover Re makes the relevant scenario calculations on an ongoing basis as part of its risk management and will specify new earnings targets as soon as the underlying probabilities are sufficiently robust.With its positioning as a reliable reinsurer with a long-term orientation, Hannover Re is a partner to its clients. The current market environment offers Hannover Re, with its consistent business approach and capital strength, attractive opportunities for further profitable growth and the continued expansion of business relationships. The company's broad range of products, its willingness to support new approaches to digital solutions and its focus on the customer will continue to generate increasing business opportunities in the near term. Hannover Re, with gross premium of more than EUR 22 billion, is the third-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with more than 3,000 staff. Established in 1966, the Hannover Re Group today has a network of more than 150 subsidiaries, branches and representative offices worldwide. The Group's German business is written by the subsidiary E+S Rück. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior".Please note the disclaimer: https://www.hannover-re.com/535917 ContactCorporate Communications: Karl Steinle tel. +49 511 5604-1500 karl.steinle@hannover-re.comMedia Relations: Oliver Suess tel. +49 511 5604-1502 oliver.suess@hannover-re.comInvestor Relations: Julia Hartmann tel. +49 511 5604-1529 julia.hartmann@hannover-re.comwww.hannover-re.com * * *14.09.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de * * * Language: English Company: Hannover Rück SE Karl-Wiechert-Allee 50 30625 Hannover Germany Phone: +49-(0)511-5604-1500 Fax: +49-(0)511-5604-1648 Internet: www.hannover-re.com ISIN: DE0008402215 WKN: 840 221 Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard), Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Luxembourg Stock Exchange EQS News ID: 1130615 End of News DGAP News Service