We generate liquidity primarily from our operational reinsurance business, investments and financing measures. Regular liquidity planning and a liquid investment structure ensure that Hannover Re is able to make the necessary payments at all times. Hannover Re’s cash flow is shown in the consolidated cash flow statement.
Hannover Re does not conduct any automated internal cash pooling within the Group. Liquidity surpluses are managed and created by the Group companies. Various loan relationships exist within the Hannover Re Group for the optimal structuring and flexible management of the short- or long-term allocation of liquidity and capital.
|Consolidated cash flow statement|
|in EUR million||2017||2016|
|Cash flow from operating activities||1,693.9||2,331.3|
|Cash flow from investing activities||(942.3)||(1,711.6)|
|Cash flow from financing activities||(690.0)||(626.9)|
|Exchange rate differences on cash||(74.5)||34.9|
|Change in cash and cash equivalents||(13.0)||27.7|
|Cash and cash equivalents at the beginning of the period||848.7||821.0|
|Change in cash and cash equivalents according to cash flow statement||(13.0)||27.7|
|Cash and cash equivalents at the end of the period||835.7||848.7|
The cash flow from operating activities, which also includes inflows from interest received and dividend receipts, amounted to EUR 1,693.9 million in the year under review as opposed to EUR 2,331.3 million in the previous year. The reduction of altogether EUR 637.4 million was essentially due to increased claims paid as a consequence of sharply higher large losses in the reporting period compared to the previous year.
The balance of cash inflows and outflows from operating activities and financing activities in an amount of EUR 942.3 million (EUR 1,711.6 million) was invested in accordance with the company’s investment policy, giving particular consideration to matching of currencies and maturities on the liabilities side of the technical account. Regarding the development of the investment portfolio please see also our remarks at the beginning of this section.
The cash outflow from financing activities amounted to EUR 690.0 million (EUR 626.9 million) in the year under review. This item includes primarily the dividends paid out by Group companies in the financial year totalling EUR 647.1 million (EUR 613.0 million).
Overall, the cash and cash equivalents therefore decreased year-on-year by EUR 13.0 million to EUR 835.7 million.
For further information on our liquidity management please see the risk report.