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Hannover Re beats its own guidance for 2011 financial year

Hannover: Based on preliminary figures, Hannover Re will generate Group net income in the order of EUR 600 million for the 2011 financial year. The company will thus comfortably surpass its profit target of at least EUR 500 million.

Investment income delivered a particularly pleasing performance and hence played a vital part in this increased profit. Most notably, the balance of realised gains and losses improved further in the fourth quarter as Hannover Re continued to use the low interest rate level to generate disposal gains on high-quality government bonds. In accordance with the strategic asset allocation, the funds that were released were reinvested primarily in corporate bonds.

The unrealised reserves in the investment portfolio nevertheless continued to rise. Although net unrealised gains and losses remained in negative territory for the full financial year, they also developed favourably in the fourth quarter. Included here are the inflation swaps taken out for hedging purposes and the fair values of securities deposits held by US clients on behalf of Hannover Re (ModCo).

The improved result for the 2011 financial year also allows for the net burden of losses from the flooding in Thailand at a cost of EUR 196 million.

The independent auditors have not yet completed their examination of the present year-end closing figures, which have also still to be adopted by the Supervisory Board.

Detailed information on the 2011 financial statements will be published by Hannover Re on 14 March 2012.

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