The gross premium in our total business increased by 8.8% as at 31 December 2017 to EUR 17.8 billion (EUR 16.4 billion). Growth of 11.2% would have been booked at constant exchange rates. We thus surpassed our guidance, which had initially anticipated an increase in the low single-digit percentage range and was ultimately raised to more than 5% over the course of the year. The level of retained premium climbed to 90.5% (89.3%). Net premium earned rose by 8.5% to EUR 15.6 billion (EUR 14.4 billion). At unchanged exchange rates the increase would have been 10.8%.
The operating profit (EBIT) fell by 19.2% to EUR 1,364.4 million (EUR 1,689.3 million) owing to the above-average burden of large losses. Group net income contracted year-on-year to EUR 958.6 million (EUR 1,171.2 million). We thus comfortably outperformed the revised guidance of EUR 800 million issued with the quarterly statement for the third quarter owing to the hurricane events. Earnings per share for the Hannover Re Group stood at EUR 7.95 (EUR 9.71).
The equity position remains highly robust: the equity attributable to shareholders of Hannover Re totalled EUR 8.5 billion (EUR 9.0 billion) as at 31 December 2017. The return on equity amounted to a good 10.9% (13.7%). The book value per share reached EUR 70.72 (EUR 74.61). In view of the exceptionally heavy losses incurred in the year under review, the forecasts provided for the 2017 financial year as shown in the following table “Business development in the year under review” were only partially achievable.
The total policyholders’ surplus, consisting of shareholders’ equity, non-controlling interests and hybrid capital, amounted to EUR 10.8 billion (EUR 11.2 billion) as at 31 December 2017.
With the publication of the annual financial statement we are also releasing the capital adequacy ratio of the Hannover Re Group calculated in accordance with the requirements of Solvency II. It increased relative to the previous year to reach a level of 260% as at 31 December 2017 (31 December 2016: 230%).
|Business development in the year under review|
|Forecast 2017||Target attainment 2017|
|Gross premium growth (Group)||Growth in the low single-digit percentage range or > 5,0% 1, 2||+11.2% at constant exchange rates|
+8.8% not adjusted for currency effects
|Gross premium growth for|
Property & Casualty reinsurance
|slight growth 1||+18.7% at constant exchange rates|
+16.4% not adjusted for currency effects
|Gross premium growth for|
Life & Health reinsurance
|moderate growth 1, 3||+1.4% at constant exchange rates|
-1.0% not adjusted for currency effects
|Return on investment 4||2.7% or > 3.0% 5||3,8%|
|Group net income||> EUR 1 billion or around EUR 800 million 6, 7||EUR 958.6 million|