Hannover Re: the somewhat different reinsurer Re: the somewhat different reinsurer March 2018 ....

Hannover Re: the somewhat different reinsurer

June 2018

Hannover Re Group Property & Casualty R/I Life & Health R/I Investment mgmt. Capital mgmt. Q1/2018 Outlook 2018 Appendix

Key facts about Hannover Re

1

3

3rd largest reinsurer

in the world

Total staff of

~3,300 employees

HR share

Majority shareholder:

50.2% held by Talanx AG

Founded by HDI

(P&C reinsurance only)

1990

Start of L&H reinsurance

as strategic growth segment

1994

Initial Public Offering

of Hannover Re

Legal form as a Societas Europaea

Hannover Rück SE since 2013

>140 subsidiaries, branches/

representative offices worldwide

Hannover Re Group


2017: India Branch started operations, acquisition of Lloyd’s syndicate Argenta

2009: Opening of an office in Shanghai, China

2008: Branches and representative offices in Brazil, Colombia, Korea and Shanghai

2006: Hannover Re Takaful B.S.C., Bahrain

2001: Hannover Re (Bermuda) Ltd., Bermuda

1997: Selected portfolios of Skandia International

Insurance Company

1996: E+S Rückversicherung AG, Germany

1995: Hannover Rück SE Malaysian Branch, Malaysia

1992: Hannover Reinsurance (Ireland) Ltd., Ireland

1990: Hamburger Internationale Rückversicherungs-AG

1990: Hannover Life Reassurance Company of America

1981: Hannover Reinsurance Group Africa

1980: Hannover Rück SE Canadian Branch, Canada

1979: International Insurance Company of Hannover, Great Britain

From in-house reinsurer to global player

2

>140 subsidiaries, branches/representative offices worldwide

Hannover Re Group


Group structure supports our business model

3

Majority owner, but operational and financial independence

>140 subsidiaries,

branch/rep. offices

worldwide

Domestic business

64.8%

International business

8 German

primary insurers

49.8%

Free floatTalanx AG*

50.2%

* Majority shareholder HDI V.a.G.

Hannover Re Group


Executive Board of Hannover Rück SE

4

Ulrich Wallin

Chief Executive Officer

Compliance, Controlling,

Corporate Communications,

Corporate Development,

Human Resources Mgmt.,

Innovation Management,

Internal Auditing, Risk Mgmt.

Roland Vogel

Chief Financial Officer

Finance and Accounting

Information Technology

Investment and

Collateral Management

Facility Management

Dr. Michael Pickel

Target Markets: North America,

Continental Europe;

Group Legal Services

Run-Off Solutions

Sven Althoff

Specialty Lines Worldwide:

Marine, Aviation, Credit, Surety and

Political Risks, United Kingdom,

Ireland, London Market and Direct

Business, Facultative R/I

Jürgen Gräber

Global Reinsurance:

Worldwide Treaty R/I, Cat XL,

Structured R/I and ILS;

Coordination of P&C Business Group

Quotations

Retrocession

Dr. Klaus Miller

Life & Health Reinsurance:

United Kingdom/Ireland,

North America, Northern,

Eastern and Central Europe

Claude Chèvre

Life & Health Reinsurance:

Africa, Asia, Australia/New

Zealand, Latin America,

Western and Southern

Europe, Longevity Solutions

Hannover Re Group


We are among the top reinsurers in the world

5

For further information please see A.M. Best “Best’s Special Report” (September 2017)

1) Net premium earned

2) Reinsurance only

Premium ranking 2016 in m. USD

Rank Group Country GWP NPW

1 Swiss Re CH 35,622 33,570

2 Munich Re DE 33,154 31,891

3 Hannover Re DE 17,232 15,192

4 SCOR FR 14,569 13,238

5 Berkshire Hathaway Inc. US 12,709 12,709

6 Lloyd's2) UK 11,576 8,694

7 RGA US 10,107 9,249

8 China Re CN 7,857 7,517

9 Great West Lifeco CA 6,195 6,112

10 Korean Re KR 5,554 3,903

11 PartnerRe BM 5,357 4,954

12 General Insurance Corporation of India IN 5,210 4,678

13 Transatlantic Holdings US 4,330 3,969

14 Everest Re BM 4,247 3,885

15 XL Group IE 4,240 3,527

1)

Hannover Re Group


Reinsurance has the character of a specialty market

6

Market size primary insurance vs. reinsurance 2016

Source: own research (global market size based on estimate of total ceded premiums by primary insurers)

With a share of 6% of the overall insurance market

Global insurance premiums

~ USD 5 trillion

Global reinsurance premiums

~ USD 315 billion

Hannover Re Group


Market +1.2%

Other -5.2%

Top 11-50 +8.6%

Top 10 +3.3%

HR +4.5%

4-year CAGR

2012 2013 2014 2015 2016

HR 5%

Growing Property and Casualty reinsurance market

7

Hannover Re outperforms the market

Source: own research (global market size based on estimate of total ceded premiums by primary insurers)

Top 10 in 2016: Munich Re, Swiss Re, Lloyd's, Hannover Re, Berkshire Hathaway, SCOR, Everest Re, Alleghany, Partner Re, XL Catlin

Top 10 ranking for each year

Top 10

43%

Top 11 - 50

25%

2016

Other

32%

Market size and concentration

188194

186185190

in bn. EUR

42%

32%

25%

38%

19%

35%

4% 5%

Hannover Re Group


2012 2013 2014 2015 2016

Life and Health reinsurance in a global perspective

8

Market size and concentration

Concentrated market due to high entry barriers

in bn. EUR

Source: own research

Top 10: Munich Re, Swiss Re, RGA, SCOR, Great-West Lifeco, Hannover Re, China Re, Berkshire Hathaway, Korean Re, Pacific Life


Top 10

94%

Top 5

68%

HR

10%

2016

58 57

74

Source: own research

Top 10: Munich Re, Swiss Re, RGA, SCOR, Great-West Lifeco, Hannover Re, China Re, Berkshire Hathaway, Korean Re, Pacific Life


60

70

6%

22%

61%

16%

68%

Market +6.5%

Other +7.9%

Top 6-10 +10.7%

Top 5 +5.0%

HR +4.2%

4-year CAGR

10%

10%

6%Other 6%

Top 6 - 10

26%

Hannover Re Group


Reinsurance market conditions will improve ...

9

Development of return on equity and Guy Carpenter Global Property Cat RoL index

... when the RoE becomes sufficiently low

Source: Guy Carpenter

Return on equity based on company data (Top 10 of the Global Reinsurance Index (GloRe) with more than 50% reinsurance business 2005 - 2017), own calculation

0.5%

17.0%

14.0%

(1.2%)

13.7%

10.8%

3.8%

12.8%12.5%

11.4%

9.4% 9.6%

3.4%

150

200

250

300

350

-15%

-11%

-7%

-3%

1%

5%

9%

13%

17%

21%

25%

29%

33%

37%

41%

45%

49%

53%

57%

61%

65%

69%

73%

77%

81%

85%

89%

93%

97%

101%

105%

109%

113%

117%

121%

125%

129%

133%

137%

141%

145%

149%

153%

157%

161%

165%

169%

173%

177%

181%

185%

189%

193%

197%

201%

205%

209%

213%

217%

221%

225%

229%

233%

237%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Return on equity GC Global Property Cat RoL Index

Hannover Re Group


Global trends

Increasing demand

for insurance of

non-diversifying risks

Strong capital base

Diversification

Expertise in risk

management

Support and expertise

in product development

and pricing

Optimising capital

requirements

Reducing cost of

capital

Managing earnings

volatility

Support in distributing

products in new

markets

Reinsurance is and will be an attractive product

10

Drivers for reinsurance demand

Value proposition R/IImpact on insurance

Global trends Value concentration

Protection gap

Demographic change

Drivers

Dem

an

d f

or

rein

su

ran

ce

Capital requirement

Volatile earnings

New products /

markets

Capital requirement Regulatory changes

Risk-based capital models

Ratings, local GAAP, IFRS

Volatile earnings Expectations of

shareholders, regulators

and rating agencies

New risks lead to

higher volatility and need

for additional know-how

High cost of capital/

need for capital

management

High cost of capital

New products/markets Emerging markets

Digitalisation/Cyber

Emerging risks

Hannover Re Group


Premium development in line with mid-term growth target

11

Gross written premium in m. EUR

10-year CAGR: +8.0%

61%55%

56% 56% 56% 55%55% 56%

60%

39%

45%44%

44% 44% 45%

45%44%

40%

8,121

11,42912,096

13,774 13,963 14,362

17,06916,354

17,791

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Property & Casualty reinsurance Life & Health reinsurance

10,275

44%

56%

Hannover Re Group


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Africa

Australia

Latin America

Asia

Other European countries

Germany

United Kingdom

North America

Well balanced international portfolio growth

12

Gross written premium (Group) in m. EUR

13,774

12,096

10,275

11,429

13,963 1)

2)

1) Japan 1%

2) CEE and Russia 3%

14,362

17,06916,354

17,791

8,121

34%

14%

7%

17%

14%

5%

6%3%

26%

18%

14%

20%

9%

Hannover Re Group


Strong earnings track record since 2009

13

Operating profit (EBIT) in m. EUR

2017: satisfactory result despite exceptionally high NatCat losses

(1.05)

6.08 6.215.02

7.04 7.438.17

9.54 9.71

7.95

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

148

1,142 1,178

841

1,3941,229

1,466

1,755 1,689

1,364

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Earnings per share (EPS) in EUR

Hannover Re Group


2.102.30

2.10

3.00

3.00 3.25 3.50 3.50

0.40

1.25

1.501.50 1.50

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Dividend per share Special dividend per share

4.75

Increased payout ratio allows stable dividends

14

Dividend per share in EUR

Payout: EUR 3.50 ordinary dividend + EUR 1.50 special dividend per share

[0%] [37%] [42%]

Payout ratio:

[35%] [43%]

3.00

[40%]

4.25

[52%] [50%] [51%]

5.00

2.60

[63%]

5.00

Hannover Re Group


13.8% 13.4% 13.7%

10.4%11.3%

12.0%

15.0% 14.7% 14.7%13.7%

10.9%11.3%

10.7%10.2% 9.9% 9.8%

5,9606,720

7,8108,533 8,763

2013 2014 2015 2016 2017

Actual

Minimum target*

Average shareholders' equity

RoE target outperformed again ...

15

Return on Equity: yearly Return on Equity: average

... even in the year 2017 with sizeable insured market losses

5-year Ø

2013 – 2017

10-year Ø

2008 – 2017

15-year Ø

2003 – 2017

* After tax; target: 900 bps above 5-year rolling average of 10-year German government bond rate ("risk free")

+2.7%

Spread over minimum target

3.7%4.0% 4.5%

3.8%

1.1%

Hannover Re Group


Hannover Re is one of the most profitable reinsurers

16

List shows the Top 10 of the Global Reinsurance Index (GloRe)

Data based on company data, own calculation

2013 2014 2015 2016 2017

Company RoE Rank RoE Rank RoE Rank RoE Rank RoE Rank avg. RoE Rank

Hannover Re 15.0% 3 14.7% 2 14.7% 1 13.7% 1 10.9% 2 13.8% 1

Peer 4, Bermuda,

Property & Casualty17.1% 2 16.6% 1 13.0% 3 12.7% 2 5.7% 3 13.0% 2

Peer 3, US,

Life & Health6.5% 10 10.6% 7 7.6% 9 10.6% 4 24.1% 1 11.9% 3

Peer 2, Switzerland,

Composite13.7% 5 10.5% 8 13.7% 2 10.6% 3 1.0% 7 9.9% 4

Peer 8, Bermuda

Property & Casualty18.0% 1 13.7% 3 9.5% 8 10.0% 5 -5.3% 9 9.2% 5

Peer 7, Bermuda


Peer 6, France,

Composite11.2% 8 9.6% 9 10.7% 4 9.3% 7 4.4% 4 9.0% 7

Peer 1, Germany,

Composite12.5% 6 11.3% 6 10.2% 7 8.3% 8 1.3% 5 8.7% 8

Peer 9, Bermuda


Peer 5, US,

Property & Casualty9.4% 9 9.4% 10 7.5% 10 5.9% 10 1.1% 6 6.7% 10

2013 - 2017

Hannover Re Group


Accelerated value creation since 2009

17

Increase of book value and accumulated paid dividends in EUR

10-year CAGR: +13.1%

23.4730.80

37.39 41.2250.02 48.83

62.61 66.9074.61 70.72

11.48

11.48

13.5815.88

17.98 20.98

23.98

28.23

32.98 37.98

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Book value per share Paid dividends (cumulative since 1994)

As at 31 December

108.70

Hannover Re Group


8,5288,997

959

(603) (86)(739)

Shareholders'equity

31.12.2016

Netincome

Dividendpayment

Change inunrealised

gains/losses

Currencytranslationand other

Shareholders'equity

31.12.2017

18

Shareholders' equity has grown significantly in the past 5 years

Policyholders' surplus in m. EUR in m. EUR

2017: increased capital management action and stronger EUR

Change in shareholders' equity

5,888

7,5518,068

8,997 8,528

642

702709

743758

2,238

1,9861,490

1,4911,492

8,768

10,239 10,267

11,231

2013 2014 2015 2016 2017

Shareholders' equity Non-controlling interests Hybrid

10,779

Hannover Re Group


Strong market positioning – one of the leading reinsurers worldwide

De-risking and diversification measures taken to lower earnings

volatility aiming to consistently produce attractive dividends

Effective cycle management, selective and disciplined underwriting in

Property & Casualty reinsurance

Lean structures which lead to the lowest administrative expense ratio

compared to our peer group

Top rating (S&P: AA-) ensures attractive new business

A superior and highly profitable reinsurer ...

19

Hannover Re's business model

... with a somewhat different approach

Increasing profitability of our non-cyclical Life & Health business

Generates noticeably higher profitability

on 5-year average in comparison with our peer competitors

Hannover Re Group


Our strategy: value creation through reinsurance

20

Our overriding target: profit and value creation

Premium growth on a long-term basis above market average

Minimum return on equity of at least 900 bps above “risk free” 1)

Achieve a profit in excess of the cost of capital (IVC, based on our ECM 2))

Lower management expenses

Competitive advantage compared to peers

Deliver a profit that is above average for the sector

Providing our clients with competitive terms

Share price to outperform weighted Global Reinsurance Index

(ISIN: DE 000 SLA 1GR 2) over a 3-year rolling period

Consistently paying a dividend that is attractive to our shareholders

Capital management in the light of distributable excess capital to achieve

attractive RoE

A sufficient equity buffer enables us to act on available and profitable

business at all times

1) After tax; target: 900 bps above 5-year average return of 10-year German government bonds

2) Economic Capital Model

Profit

and

value

creation

Capital

management

Cost

leadership

Shareholder

value

Profitable

growth

Hannover Re Group


Key performance indicators for the strategic cycle 2018 - 2020

21

Target Matrix

Business group Key figures 2018

Group Return on investment1) ≥ 2.7%

Return on equity2) ≥ 9.5%

Earnings per share growth (y-o-y) ≥ 5%

Economic value creation3) ≥ 6.5%

Solvency ratio4) ≥ 200%

Property & Casualty R/I Gross premium growth5) 3% - 5%

Combined ratio6) ≤ 96%

EBIT margin7) ≥ 10%

xRoCA8) ≥ 2%

Life & Health R/I Gross premium growth9) 3% - 5%

Value of New Business (VNB)10) ≥ EUR 220 m.

EBIT growth ≥ 5%

xRoCA8) ≥ 2%

1) Excl. effects from ModCo derivatives 2) After tax; target: 900 bps above 5-year average return of 10-year German government bonds

3) Growth in economic equity + paid dividend; target: 600 bps above 5-year average return of 10-year German government bonds

4) According to our internal capital model and Solvency II requirements 5) On average throughout the R/I cycle; at constant f/x rates

6) Incl. expected net major losses 7) EBIT/net premium earned

8) Excess return on allocated economic capital 9) Organic growth only; annual average growth (5-year period), at constant f/x rates

10) Based on Solvency II principles and pre-tax reporting

Hannover Re Group


Sustainability at Hannover Re

22

Strategic approach: We are committed to sustainability, integrity and compliance

Commitment to a responsible and transparent corporate goverance geared to lasting success

Continous refining of our efficiently functioning compliance management

Maintaining an open and ongoing dialogue with our stakeholders

Promoting, preserving and restoring the physical and mental well-being of employees

Promoting diversity and equal opportunities

Continous refinement of our environmental management system

Ongoing evaluation of suppliers according to environmental and social standards

Engagement in environmental and social projects across all locations

Development and Expansion of sustainable insurance products

Refinement of the sustainability approach within our asset management

Intensifying the sharing of knowledge about emerging risks with our customers and business

partners

Su

sta

ina

bilit

y

str

ate

gy

Governance

and

Dialogue

Product

Responsibility

Employees

Environment

and Society

Hannover Re Group


Sustainability at Hannover Re

23

Broad range of activities to support our strategic goals

Sustainability Report since 2011

Non-financial statement since 2018

Prime Rating of oekom research and regular

participation in CDP rating

Member of the FTSE4Good Index and MSCI

Participation in various initiatives

Sustainability strategy:

Implementation and regular

revision since 2011

Company daycare center for

infants up to the age of 3

Mentoring programme for women

Implementation of an Employee

Assistance Programme (EAP)

Participation in the initiative “Fair company”

Development of sustainable insurance solutions

(i.e. microinsurance, energy savings warranties)

Sresponsible investment policy since 2012;

Best-in-Class approach implemented since 2016

~ 90 % of assets under own management

are screened according to ESG criteria

according to UN Global Compact

Member of different initiatives like

Geneva-Asssociation and

InsuResilience)

Carbon neutrality achieved for

the Hannover-based business

in 2016

Environmental management

system: certified according to DIN

EN ISO 14001 since 2012 and

EMAS Standard since 2015

Worldwide social engagement for decades

Governance

& Dialogue

Product

Responsibility

Employees Environment

& Society

Hannover Re Group


Present on all continents

24

Canada

Toronto

USA

Charlotte

Chicago

Denver

New York

Orlando

Colombia

Bogotá

Bermuda

Hamilton

Mexico

Mexico City

Australia

Sydney

Malaysia

Kuala Lumpur

China

Hong Kong

Shanghai

Japan

Tokyo

South Korea

Seoul

Bahrain

Manama

Spain

Madrid

Ireland

Dublin

United Kingdom

London

France

Paris

Germany

Hannover

Italy

Milan

Sweden

StockholmThe Americas

Europe

Asia

Africa Australia

India

Mumbai

Brazil

Rio de JaneiroSouth Africa

Johannesburg

Life & Health reinsurance Property & Casualty and Life & Health reinsuranceProperty & Casualty reinsurance

Taiwan

Taipei

Côte d’Ivoire

Abidjan

Hannover Re Group


HR share outperforms indices over a 3-year rolling period

25

Performance comparison (incl. reinvested dividends)

Performance vs. indices

60%

80%

100%

120%

140%

160%

180%

200%

Hannover Re HDAX GloRe

+61%

+37%

+31%

Hannover Re Group


Yearly Total Shareholder Return (TSR) of 12.3%

26

Value creation since IPO in m. EUR 2016 2017

Market capitalisation as of date 12,397 12,651

- Market capitalisation at IPO

(Nov 1994)1,084 1,084

+ Dividend payments

(cumulative)4,338 4,941

- Capital increases

(1996, 1997, 2001, 2003)811 811

Value creation since IPO 14,840 15,697

+1,348%

Hannover Re Group


We are a prefered business partner

27

We are somewhat different

Property & Casualty reinsurance

Our

strategic

contribution

from

P&C

Central U/W

Effective cycle management and focus on profitability

• Selective growth: increase market share in “hard” markets only

• No pressure to grow due to low administrative expense ratio

• Above-average profitability due to stringent underwriting approach with

focus on bottom line

Conservative reserve policy led to build-up of reserve

redundancies over the last years

• Further strengthening of the confidence level of our P&C reserves may be

limited due to IFRS accounting constraints

Positive effect on C/R

Distribution channels

• Flexible cost base due to relatively higher share of business written via

brokers (~2/3)

Central underwriting with local talent is key to our success

• Secures consistent underwriting decisions

Cycle

mgmt.

Reserving

Distribution

Property & Casualty R/I


Strategy contribution of the P&C business group

28

Be among world's most profitable R/I & steer volatility in line with our profit targets

Our value proposition to our

customers

Our profit contribution

* xRoCA= eXcess Return on Capital Allocated

Tailor-made solutions

• Comprehensive range of products which

can be tailored to our customers’ needs

Solution driven

• Constant monitoring of markets to identify

trends and classes of business that show

specific potential for the future

Flexible organisation

• Utilisation of all distribution channels,

i.e. direct as well as via intermediaries

Fair and available

• Short lines of communication towards

customers enabling speedy delivery of

solutions

xRoCA* ≥ 2%

EBIT margin ≥ 10%

Combined ratio ≤ 96%



29

* All lines of Property & Casualty reinsurance except those stated separately

Our Property & Casualty reinsurance business divisions

Target

markets

Specialty

lines

worldwide

Global

R/I

North America*

Continental Europe*

Marine

Aviation

Credit, surety and political risks

UK, Ireland, London market

and direct

Facultative R/I

Worldwide Treaty R/I*

Cat XL

Structured R/I and ILS

Target markets

29%

Specialty lines

worldwide26%

Global R/I45%

GWP split 2017 EUR 10,711 m.



More than 2/3 of our business is written via brokers

30

Breakdown of treaties by volume Breakdown of business written

Proportional67%

Non-proportional33%

Broker business70%

Direct business30%

GWP 2017: EUR 10,711 m.(2016: EUR 9,205 m.)



North America

38%

Other Europ.

countries20%

Asia13%

Germany9%

United Kingdom

9%

Latin America

6%

Africa2%

Australia3%

35%

19%

15%

11%

9%

6%3% 2%

Property & Casualty reinsurance: selective growth

31

GWP split by line of business in m. EUR GWP split by regions

* All lines of business except those stated separately

20172016

15%

18%

4%

2014 2015 2016 2017

Cat XL

Structured R/Iand ILS

Worldwidetreaty*

Marine

Aviation

UK, IR, Londonmarket & direct

Credit, suretyand pol. risks

Facultative R/I

ContinentalEurope*

North America*

7,903 14%

19%

3%4%6%

7%

12%

15%

16%

9,338 9,205

15%

18%

12%

7%5%5%3%

19%

12%

4%

4%

18%

15%

11%

7%

5%3%3%

20%

14%

4%

10,711

16%

14%

8%

6%

7%

2%3%

17%

24%

3%



7,818 7,903

9,338 9,205

10,711

2013 2014 2015 2016 2017

Premium development in line with selective U/W approach

32

Gross written premium in m. EUR EBIT/EBIT margin in m. EUR

EBIT margin exceeds target of 10%

CAGR:

6.8%

1,061

1,191

1,341 1,340

1,120

15.5%17.0% 16.6% 16.8%

12.2%

2013 2014 2015 2016 2017

EBIT EBIT margin



111.3%

93.1%

96.0%

91.1%

140.9%

103.7%

96.3%

121.1%

97.7%

99.8%

0% 20% 40% 60% 80% 100% 120% 140% 160%

North America*

Continental Europe*

Marine

Aviation


UK, Ireland, London market and direct

Facultative R/I

Worldwide Treaty* R/I

Cat XL


11.4%

19.6%

21.5%

133.0%

18.3%

-18.4%

5.3%

13.2%

-1.7%

4.9%

12.2%

2017: Combined Ratio slightly above MtCR

33

Positive development of reserves led to exceptional aviation result

Combined Ratio vs. MtCR

MtCR = Maximum tolerable Combined Ratio

Target

markets

Specialty

lines

worldwide

Global

R/I

Combined Ratio


Total

EBIT

margin

-14.7%



At an MtCR of ~96% we earn 900 bps above risk free

34

Net premium

earned

Discount effect on

P&C net loss reserves

(% of NPE)

Capital margin

above risk free

(pre-tax)

Maximum

tolerable

Combined Ratio

As at March 2018

NPE + Economic revaluation - Capital margin = MtCR

+ - =

2018: 100% + 3.6% - 7.4% = 96.2%

2017: 100% + 3.8% - 7.7% = 96.1%

2016: 100% + 3.4% - 7.4% = 96.0%

2015: 100% + 3.8% - 7.6% = 96.3%



MtCR varies substantially by line of business

35

2018

As at March 2018


North America*

Continental Europe*

Marine

Aviation


Facultative R/I

Cat XL

Worldwide Treaty R/I*

Total Property & Casualty R/I

Capital marginNet premium earned (100%) MtCREconomic revaluation

UK, Ireland, London market and direct

+ - =


7.4%

2.2%

15.5%

7.5%

9.2%

6.8%

9.0%

8.4%

13.6%

7.5%

12.0%

3.6%

0.7%

4.0%

3.3%

5.0%

4.9%

3.1%

5.5%

3.2%

3.4%

7.1% 95.1%

95.9%

89.6%

97.0%

94.1%

95.8%

88.6%

95.8%

96.2%

98.1%

98.5%



Stable redundancy despite challenging environment

36

Reserve study review by WillisTowers Watson confirms redundancies*

Over the last 8 years, on average 2.4% of the net earned loss ratio for P&C

business is due to net reserve redundancy increases

in m. EUR

Year Redundancy Increase redundancy Effect on loss ratioP&C premium

(net earned)

2009 867 276 5.3% 5,230

2010 956 89 1.6% 5,394

2011 1,117 162 2.7% 5,961

2012 1,308 190 2.8% 6,854

2013 1,517 209 3.1% 6,866

2014 1,546 29 0.4% 7,011

2015 1,887 341 4.2% 8,100

2016 1,865 -22 -0.3% 7,985

2009 - 2016

total1,275 53,401

2009 - 2016

average159 2.4% 6,675

* Redundancy of loss and loss adjustment expense reserve for its non-life insurance business against held IFRS reserves, before tax and minority participations.

WillisTowers Watson reviewed these estimates - more details shown in appendix.



Several levels of protection provide more NatCat capacity ...

37

... and thus create additional earnings at a defined risk appetite

As at March 2018

Div. cat swapsmax. ~ EUR 90 m.

Whole Account~ EUR 280 m.

K-Cession securitisation~ USD 604 m. + expected premium

Group EBITEUR 1,364 m.

~ EUR 2.5 bn.

Agg. XL

~ EUR 200 m.

Policyholders' surplus(shareholders' equity, non-controlling interest, hybrid capital)

2017: EUR 10,779 m.



The risk is manageable

38

Stress tests for natural catastrophes after retrocessions

Effect on forecast net income in m. EUR 2016 2017

100-year loss (391.4) (378.2)

250-year loss (541.4) (542.5)

100-year loss (850.3) (921.0)

250-year loss (1,139.4) (1,274.8)

100-year loss (223.9) (183.1)

250-year loss (281.9) (256.6)

100-year loss (363.1) (282.2)

250-year loss (623.5) (522.0)

100-year loss (440.6) (420.2)

250-year loss (795.4) (921.7)

100-year loss (201.0) (154.4)

250-year loss (432.3) (445.5)

in m. EUR Limit 2017 Threshold 2017Actual utilisation

(July 2017)

All natural catastrophe risks*

200-year aggregate annual loss 1,815 1,634 1,409

Earthquake Australia

Winter storm Europe

Hurricane US/Carribean

Typhoon Japan

Earthquake Japan

Earthquake US West Coast

* Loss relative to the underwriting result



Low expense ratio is an important competitive advantage

39

Hannover Re largely maintained its ratio in contrast to increasing industry trend

Expense ratio (P&C reinsurance)*

* Source: S&P Global Reinsurance Highlights 2017 (TOP 27 global reinsurers' P&C reinsurance business); Hannover Re figures own calculation

2.5% 2.2%

24.5%

26.4%27.2%28.7%

6.9%

24.4%

31.3%

2010 2011 2012 2013 2014 2015 2016 HannoverRe P&C

2016

HannoverRe P&C

2017

Hannover Re admin expense ratio Hannover Re commission expense ratio Hannover Re expense ratio

Administrative expense ratio Commission expense ratio Expense ratio



We are somewhat different

40

Life & Health reinsurance

We offer small company flexibility with a large company balance sheet

We are a highly flexible business partner

• Tailor-made services and solutions

• Ability to anticipate market and client demands

We foster an efficient organisational set-up

• 900 experts in 25 offices on all continents

• Highly empowered staff

We have an undogmatic approach

• Entrepreneurial spirit

• Appetite to innovate industry solutions

We are committed to responsiveness and time to market

• Rapid decision-making processes

• In-depth knowledge of local markets

Our

strategic

contribution

from

L&H

Responsive

Flexible

Efficient

Undogmatic

Life & Health R/I


Strategy contribution of the L&H business group

41

We have ambitious profit and growth targets

Our value proposition to our

customers

Our profit contribution

Financial solutions

• Tailored reinsurance structures for efficient

capital or liquidity management

Risk solutions

• Competitive terms, capacity and reinsurance

solutions for all types of technical risks

Reinsurance services

• Improvement of sales and underwriting

processes

VNB1) ≥ EUR 220 m.

EBIT growth ≥ 5%

xRoCA2) ≥ 2%


2) xRoCA= eXcess Return on Capital Allocated

Life & Health R/I


Reinsurance universe Positive economic value expected

Writing attractive traditional life & health business

42

Whilst positioning ourselves for sustainable growth with a clear strategic focus

Risk solutions

Provide terms and capacity for

all types of technical risks.

Financial solutions

Achieve financial objectives for

our clients.

Reinsurance services

Meet the individual needs of

our clients.

5 Hard-to-quantify risks

3 Alternative distribution channels

2 Companies in transition

1 High growth markets

4 Underserved consumers

Our strategic focus

5

3

2

1

4

Life & Health R/I


Our clients are served in the markets by our network of offices

43

and by our solution-orientated expert networks

Automated

U/W systems

R&D

technology

Financial

solutions

Risk

assessment

Health (re-)

insurance

Biometric

research

Longevity

solutions

Expert networks

Life & Health R/I


Property & Casualty reinsurance business Life & Health reinsurance business

Primary differences between L&H and P&C R/I business

44

Simplified illustration

Share of proportional business (ITO premium) Low High

Reinsurance contract terms Short term Long term

Saving component in premium None Common

Involvement of brokers Low High

Accounting considerations (premium) Single Recurring

Medical / financial underwriting Seldom Often

Multiple primary insurance for the same risk Likely Unlikely

IBNR reserve impact Low High

Number of reinsurer participating in one treaty Few Many

Number of competitors Few Many

Life & Health R/I


45

We have well defined reporting categories

Financial solutions

Profitability is less likely to be affected by the

underlying biometric risks

Risk solutions

Profitability depends largely on the underlying

biometric risks

Transactions which include components to provide

alternative means of accessing capital

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

Life & Health R/I


North America

29%

United Kingdom

21%Asia17%

Australia10%

Other Europ.

countries12%

Latin America

5%

Germany3%

Africa3%

Life & Health reinsurance: a well diversified portfolio

46

GWP split by reporting categories GWP split by regionsin m. EUR

25%

15%

46%

17%

19%

46%

18%

30%

24%15%

10%

11%

4%3%

3%

201720162014 2015 2016 2017

Morbidity

Mortality

Longevity

Financialsolutions

18%

46%

19%

17%

7,149

21%

13%

7,080

6,459

7,731

20%

16%

46%

18%

43%

23% 24%

45%

18%

13%

Life & Health R/I


Good underlying profitability in Life & Health reinsurance

47

6,1456,459

7,731

7,149 7,080

2013 2014 2015 2016 2017

Gross written premium in m. EUR EBIT/EBIT margin

Recent results affected by legacy US mortality business

151

264

405

343

245

2.8%

4.9%

6.2%5.3%

3.8%

2013 2014 2015 2016 2017

EBIT EBIT margin

in m. EUR

CAGR:

3.2%

Life & Health R/I


Value of New Business (VNB) above target

48

2016 VNB extraordinary high due to large transactions

Value of New Business development in m. EUR

309

448

543

893

364

2013 2014 2015 2016 2017

1) Based on MCEV principles and post-tax reporting (in 2015 cost of capital already increased from 4.5% to 6% in line with Solvency II)


Target

≥ EUR 220 m.

1) 1) 1) 2) 2)

Life & Health R/I


415 296689

284 389

612

363

159

463519

649

718

952910 561

550

554

1.305

674

225

2013 2014 2015 2016 2017

Q1 Q2 Q3 Q4

2,225

1,931

3,105

2,331

1,694

Continued positive operating cash flow

49

Operating cash flow in m. EUR in m. EUR

2017: AuM -4.2% driven by strengthening of the Euro and higher dividend payment

Assets under own management (AuM)

31,875

36,228

39,347

41,793 40,057

2013 2014 2015 2016 2017

Investment mgmt.


Very pleasing net investment income

50

Decrease in total investments mainly driven by strengthening of EUR

Total investments in m. EUR

1,054 1,0961,270 1,218

1,539

357 376

395332

235

2013 2014 2015 2016 2017

Income and expenses on funds withheld andcontract deposits

Net income from assets under own management

Investment income in m. EUR

31,87536,228

39,347 41,793 40,057

14,343

15,91813,990

11,84410,903

46,218

52,146 53,337 53,63750,960

2013 2014 2015 2016 2017

Funds withheld and contract deposits

Assets under own management

1,4121,472

1,6651,550

1,774

Investment mgmt.


Investment category 31 Dec 2017

Fixed-income securities 87%

- Governments 30%

- Semi-governments 17%

- Corporates 32%

Investment grade 27%

Non-investment grade 5%

- Pfandbriefe, Covered Bonds, ABS 8%

Equities 2%

- Listed Equity <1%

- Private Equity 2%

Real estate/real estate funds 5%

Others 1%

Short-term investments & cash 4%

Total market values in bn. EUR 40.5

Asset allocation

Ordinary income supported by less liquid asset classes

51

Real estate and Private Equity boost ordinary income beyond target return

Economic view based on market values as at 31 December 2017

* Before real estate-specific costs

Ordinary income split EUR 1,305 m.

Governments16%

Semi-governments

12%

Corporates33%

Pfandbriefe, Covered

Bonds, ABS9%

Listed Equity2%

Private Equity13%

Real estate*13%

Others1%

Short-term investments

& cash2%

Investment mgmt.


Barbell strategy stopped and slight risk reduction ...

52

... reflected at government bonds and corporates

Asset allocation1)

Investment category 2014 2015 2016 2017 31 Mar 18

Fixed-income securities 90% 87% 87% 87% 87%

- Governments 21% 26% 28% 30% 32%

- Semi-governments 19% 17% 18% 17% 17%

- Corporates 36% 34% 33% 32% 30%

Investment grade 33% 30% 28% 27% 26%

Non-investment grade 3% 4% 4% 5% 4%

- Pfandbriefe, Covered bonds, ABS 14% 10% 9% 8% 8%

Equities 2% 3% 4% 2% 2%

- Listed equity <1% 1% 2% <1% <1%

- Private equity 2% 2% 2% 2% 2%

Real estate/real estate funds 4% 4% 5% 5% 5%

Others 1% 1% 1% 1% 1%

Short-term investments & cash 4% 5% 4% 4% 5%

Total market values in bn. EUR 36.8 39.8 42.3 40.5 40.9

2)

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 1.271,9 m. (EUR 1,201.9 m.) as at 31 March 2018

2) Of which Pfandbriefe and Covered Bonds = 78.8%

Investment mgmt.


Fixed-income book well balanced

53

Geographical allocation mainly in accordance with our business diversification

IFRS figures as at 31 March 2018

GovernmentsSemi-

governmentsCorporates

Pfandbriefe,

Covered bonds,

ABS

Short-term

investments,

cash

Total

AAA 78.6% 64.1% 1.1% 67.2% - 48.9%

AA 11.7% 23.7% 14.5% 17.2% - 15.6%

A 5.3% 5.9% 33.5% 6.4% - 14.9%

BBB 2.5% 1.5% 43.0% 6.7% - 16.2%

<BBB 1.9% 4.7% 7.8% 2.4% - 4.5%

Total 100.0% 100.0% 100.0% 100.0% - 100.0%

Germany 13.5% 49.4% 4.4% 26.1% 29.3% 19.4%

UK 8.4% 2.3% 8.1% 11.0% 9.6% 7.4%

France 1.1% 1.4% 7.8% 6.3% 0.1% 3.6%

GIIPS 1.0% 1.0% 4.5% 5.4% 0.0% 2.4%

Rest of Europe 2.7% 14.3% 16.0% 18.4% 4.2% 10.5%

USA 59.4% 6.7% 34.4% 9.8% 14.8% 34.9%

Australia 4.0% 7.7% 8.6% 10.9% 7.1% 6.9%

Asia 5.8% 6.3% 5.2% 0.7% 21.1% 6.1%

Rest of World 4.3% 10.8% 11.1% 11.4% 13.8% 8.8%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Total b/s values in m. EUR 13,038 6,966 11,500 2,989 2,052 36,545

Investment mgmt.


Currency allocation matches liability profile of balance sheet

54

Duration-neutral strategy applied

2017 4.8

2016 5.0

2015 4.4

2014 4.6

2013 4.4

2012 4.5

Modified duration

Currency split of investments

Modified duration of fixed-

income mainly congruent with

liabilities

GBP’s higher modified duration

predominantly due to life

business

Modified duration as at 31 March 2018: 4.8

EUR30.1%

USD45.7%

GBP8.3%

AUD5.7%

CAD2.8%

Others7.4%

5.9

5.22.2

Modified

duration of

portfolio

4.2

6.5

4.7

Investment mgmt.


Stress tests on assets under own management

55

Unchanged focus on yields and credit spreads; reduced relevance of equities

As at 31 March 2018

Portfolio ScenarioChange in market value

in m. EUR

Change in OCI before tax

in m. EUR

-10% -80 -80

-20% -161 -161

+50 bps -855 -775

+100 bps -1,665 -1,509

Credit spreads +50% -613 -590

Equity (listed and private equity)

Fixed-income securities

Investment mgmt.


Our capital structure consists not only of equity

56

Use of hybrids, securitisations etc. lowers cost of capital and levers RoE

Competitive advantage through low cost of capital (WACC)

Equity capital is by far the most expensive

Therefore, we make optimal use of equity substitutes, e.g. hybrid capital

Conventional reinsurance/retrocession on an opportunistic basis

(i.e. use of other reinsurers' capital)

Securitisations, capital market transactions

Type Nominal amount Issue date First call date Maturity Coupon rate

Senior unsecured bond

ISIN: XS1808482746EUR 750 m. 2018-04-18 2028-01-18 2028-04-18

Annually on every April 18

(commencing April 18, 2019): 1.125% p.a.

Undated subordinated bond

Format: PerpNC10,8

ISIN: XS1109836038

EUR 500 m. 2014-09-15 2025-06-26 PerpetualUntil first call date: 3.375% p.a. and thereafter

3.25% p.a. above 3 months EURIBOR

Dated subordinated bond

Format: 30,6NC10,6

ISIN: XS0856556807

EUR 500 m. 2012-11-20 2023-06-30 2043-06-30Until first call date: 5.00% p.a. and thereafter


Dated subordinated bond

Format: 30NC10

ISIN: XS0541620901

EUR 500 m. 2010-09-14 2020-09-14 2040-09-14First 10 years: 5.75% p.a. and thereafter


Capital mgmt.


Financial strength ratings

57

As at 1 June 2018

1) Negative outlook

2) Under review with developing implications

Group S&P A.M. Best

General Reinsurance Corp. AA+1) 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+1) A

XL Bermuda A+ A2)

PartnerRe A+ A

Capital mgmt.


We create lower capital charges for our cedents "AA" range S&P capital charge on reinsurance recoverables = 0.8% ("A" = 1.4%, BBB = 3.1%)

As an above-average rated R/I, we "minimise" our cedents' cost of capital

We get very high allocations when we quote for business >90% vs. some 50% for a Bermuda start-up

An above-average rating has numerous benefits ...

58

... although we might not (yet) get paid for it

We are on virtually all broker lists, with cedents often demanding specific R/Is

We have a better showing of business than the average player Access to all lines of business

We enjoy a highly diversified, high quality book of business

Our cost of financing in the capital markets is lower Hybrid bonds trade at tighter spreads

Better conditions for LoCs and credit lines

Capital mgmt.


Solvency II: Internal capital model approved by BaFin

59

Solvency II

Pillar IQuantitative requirements

Capital requirements

(SCR/MCR*)

Own funds (solvency balance

sheet)

Standard model and internal

model

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.

We support our clients in their

preparations for Solvency II

through the flexible design of our

products and by sharing

experiences.

Pillar IIQualitative requirements

Internal controls, risk

management and key functions

Internal risk assessment

Supervisory review procedure

Pillar IIIDisclosure requirements

to the regulator and the public

with the goal of market

transparency and market

discipline

Hannover Re

* SCR = Solvency Capital Requirement; MCR = Minimum Capital Requirement

Capital mgmt.


Capital position even more comfortable due to OpRisk approval

60

Internal Metrics1)

Solvency II 2)

Solvency II3)

in m. EUR 31.12.2017 31.12.2017 31.12.2016

Available Economic Capital /

Eligible Own Funds13,041 12,296 12,835

Confidence Level 99.5% 99.5% 99.5%

Required Capital /

Solvency Capital Requirements4,729 4,729 5,586

Excess Capital 8,312 7,567 7,249

Capital Adequacy Ratio (CAR) 276% 260% 230%

Minimum Target Ratio

(Limit)180% 180% 180%

Minimum Target Ratio

(Threshold)200% 200% 200%

Capital adequacy above targets with substantial excess capital

1) Internal Metric: full internal model, full transferability of capital

2) Regulatory view (Solvency II): full internal model incl. operational risk (starting Q3/2017), confidence level at 99.5%; own funds based on the Solvency II reporting as

of year-end 2017; small deviations compared to annual report since the amounts are based on final Solvency II year end reporting as presented in the SFCR.

3) Regulatory view (Solvency II): partial internal model with standard formula for operational risk, confidence level at 99.5%; small deviations compared to annual report

2016 since the amounts are based on final Solvency II year end reporting as presented in the SFCR.

4) Non-available minority interests mostly consist of non-controlling interests in E+S Rückversicherung AG

-745 Haircut for minority

interests4)

Approval of internal

model for OpRisk-857

Capital mgmt.


Increasing buffer above Solvency II capital targets

61

Development of the capital adequacy ratio (regulatory view)

Despite significant changes in economic environment

2016: Overall increase in available capital due to positive results and favourable new

business developments in line with increase in required capital

2017: Increase in solvency ratio due to application of full internal model (including OpRisk),

f/x-induced reduction in funds and capital requirements

11,98312,835 12,296

5,433 5,5864,729

Q4/2015 Q4/2016 Q4/2017

Eligible Capital Solvency Capital Requirements (SCR)

221%230%

260%

Threshold 200%

Limit 180%

87%

4%9%

0.3%

Tier 1 - unrestricted

Tier 1 - restricted

Tier 2

Tier 3

2017 capital composition

Capital mgmt.


High-quality capital base

62

87%

9,287503

3,981 1,732

656745

10,636535 4%

1,091 9%

1,273 0.3%

34

Shareholders'equity incl.minorities

(IFRS)

Adjustments forassets under

ownmanagement

Adjustments fortechnicalprovisions

Adjustmentsdue to taxeffects and

others

Foreseeabledividends

Minority haircut Tier 1unrestricted

capital

Hybrid capital Tier 3 Basic ownfunds

Reconciliation (IFRS Shareholders’ Equity/Solvency II Own Funds) in m. EUR

Own funds largely dominated by Tier 1 capital supplemented by hybrid capital

Tier 3

Unutilised Tier 2

capacity

Tier 2

capital

Tier 1

hybrid capital

Tier 1

unrestricted capital

As at year-end 2017; small deviations compared to annual report since the amounts are based on final Solvency II year end reporting as presented in the SFCR.

1) Adjustments for technical provisions incl. risk margin

2) Foreseeable dividends and distributions refer to Hannover Rück SE dividend as well as dividends to minorities within Hannover Re Group

3) Tier 3 capital arises as a consequence of net deferred tax assets in subsidiaries of the Hannover Re Group. We have changed presentation compared to 2016 due to

a clarification of the Solvency II requirements issued in 2017

1)

2)

3)

12,296

Capital mgmt.


6,511

4,729

12,296

3,485

2,355

3,462

282

637

3,710

1,782

Property & Casualty

Life & Health

Market

Counterparty default

Operational

Required capital before tax

Deferred taxes

Required capital after tax

Eligible own funds*

Capital efficiency supported by high diversification

63

Risk capital for the 99.5% VaR (according to internal economic capital model) in m. EUR

Details of Solvency II capital requirements

As at 31 December 2017

* According to the internal model (before haircut for minority interest)

36% diversification

10,221

32% 21% 42% 1% 4%

Capital mgmt.


Hannover Re is well diversified within each risk category ...

64

... and has a well balanced risk profile

Risk capital for the 99.5% VaR (according to economic capital model) in m. EUR

3,485

2,355

3.462

637

2,472

2,254

1,240

1,922

1,531

632

423217

2,371

2,403

1,038

901

821

549

2,251

0 2,000 4,000 6,000

Premium (incl. catastrophe)

Reserve

Underwriting risk property and casualty

Mortality (incl. catastrophe)

Longevity

Morbidity and disability

Lapse

Expense

Underwriting risk life and health

Credit and spread

Interest rate

Foreign exchange

Equity

Real estate

Market risk

Operational risk

Underwriting

risk property

and casualty

Underwriting

risk life and

health

Market risk


26%

50%

39%

4,726

4,726

5,713

Capital requirement

Diversification

Operational

risk

Capital mgmt.


Favourable start to 2018

65

EBIT increase of +8.5% outperforms NPE growth

Figures in EUR

GWP

4,5475,345

Q1/2017 Q1/2018

F/x-adj.: +27.5%; driven by a

few large P&C transactions

NPE EBIT Group net income

3,738 3,999

Q1/2017 Q1/2018

400 434

Q1/2017 Q1/2018

265 273

Q1/2017 Q1/2018

F/x-adjusted: +16.1% Supported by strong underwriting result from both

business groups and above-target investment income

Return on Equity

13.0%Well above minimum

target of 9.5%

Book value per share

P&C R/I EBIT: 339 m.

Very satisfying EBIT margin

(14.0%) supported by strong

investment income

C/R of 95.9% meets the set target

Strong premium growth (f/x-adj.

+38.8%) driven by new business in

Structured R/I and worldwide treaty

L&H R/I EBIT: 96 m.

EBIT growth (+6.9%) driven by

worldwide biz excl. US;

development of legacy US mortality

biz better than expectations

Strong premium growth (f/x-adj.

+9.2%) above expectations

High one-off tax burden due to re-

organisation following US tax reform

Investments NII: 391 m.

RoI from AuM: 3.3%

RoI significantly exceeds target

(≥2.7%)

Stable ordinary income

Realised gains up due to slightly

changed investment strategy

EUR 69.27-2.1%: reduced OCI (i.e. f/x-movement,

interest rates + spread increases)

+17.6%+7.0%

in m. in m. in m. in m.

+8.5% +3.3%

Solvency II ratio

31.12.2017: 260%ERER

Q1/2018


Strong growth in both business groups and pleasing NII ...

66

... produces favourable Group net income

Group figures in m. EUR Q1/2017 Q1/2018 Δ

Gross written premium 4,547 5,345 +17.6%

Net premium earned 3,738 3,999 +7.0%

Net underwriting result (23) 37 -

- Incl. funds withheld 49 96 +93.7%

Net investment income (NII) 393 391 -0.4%

- From assets under own mgmt. 320 333 +4.0%

- From funds withheld 73 59 -19.5%

Other income and expenses 30 5 -82.5%

Operating profit/loss (EBIT) 400 434 +8.5%

Interest on hybrid capital (18) (18) +0.1%

Net income before taxes 382 416 +8.9%

Taxes (96) (117) +21.9%

Net income 286 299 +4.5%

- Non-controlling interests 22 26 +20.3%

Group net income 265 273 +3.3%

Retention 89.6% 91.3%

EBIT margin (EBIT/Net premium earned) 10.7% 10.8%

Tax ratio 25.1% 28.1%

Earnings per share (in EUR) 2.20 2.27

Q1/2018


Significant top and bottom line growth

67

Increased underwriting result and strong investment income

Property & Casualty R/I in m. EUR Q1/2017 Q1/2018 Δ



Net underwriting result

incl. interest on funds withheld96 100 +4.0%

Combined ratio

incl. interest on funds withheld95.6% 95.9% +0.3%p

Net investment income from assets

under own management238 260 +9.2%

Other income and expenses (24) (21) -14.0%


Tax ratio 24.7% 23.3% -1.4%p

Group net income 215 235 +9.0%


YTD

GWP f/x-adjusted +38.8%; particularly strong growth in

Structured R/I and Worldwide treaty; further growth in

other business lines

NPE f/x-adjusted +22.4%

Major losses of EUR 73 m. below budget for Q1/2018

(3.0% of NPE)

Unchanged policy regarding setting of loss reserves

Satisfactory ordinary investment income and positive

contribution from realised gains

EBIT margin of 14.0%

(Q1/2017: 14.3%), well above target (10%)

Q1/2018


672

291

863

1,730

662724

559714

846

1,790

90

458

240

662

981

478578

426573

627

1,127

73

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1/2018

Gross Net Expected large losses (net)

Major losses below budget of EUR 167 m. for Q1/2018

68

Natural and man-made catastrophe losses* in m. EUR

* Up to 2011 claims over EUR 5 m. gross, from 2012 onwards claims over EUR 10 m. gross

Natural and man-made catastrophe losses in % of Property & Casualty premium

13% 5% 14% 25% 9% 9% 7% 8% 9% 17% 3%

11% 5% 12% 16% 7% 8% 6% 7% 8% 12% 3%

Expected large losses (net) in m. EUR

428 450 500 530 560 625 670 690 825 825 825

Q1/2018


Overall benign large loss experience in Q1/2018

69

Catastrophe losses* in m. EUR Date Gross Net

Storm "Friederike", Europe 17. - 18. Jan 47.9 31.5

1 Natural catastrophe 47.9 31.5

1 Property claim 19.1 19.0

1 Credit claim 22.9 22.9

3 Major losses 89.9 73.4

* Natural catastrophes and other major losses in excess of EUR 10 m. gross

Q1/2018


Pleasing EBIT growth of 6.9%

70

US mortality results better than expected

Life & Health R/I in m. EUR Q1/2017 Q1/2018 Δ



Net underwriting result

incl. interest on funds withheld(46) (4) -91.9%

Net investment income from assets

under own management81 72 -10.7%

Other income and expenses 55 28 -50.0%


EBIT margin 5.7% 6.1% +0.4%p

Tax ratio 28.4% 45.9% +17.5%p

Group net income 61 51 -15.7%


YTD

GWP f/x-adj. +9.2%, mainly from Asia and United

Kingdom

NPE f/x-adjusted growth +7.4%

Improved technical result driven by better morbidity

experience

Stable ordinary investment income

Other income lower due to f/x effects; contribution from

deposit accounted treaties of EUR 45 m. (Q1/2017:

EUR 47 m.)

Targeted EBIT growth of +5% achieved

Tax ratio above long-term average due to changes in

business set-up linked to the US tax reform

Q1/2018


Net investment income well above 2.7% target for 2018

71

Unrealised gains lower due to higher interest rates and credit spreads

* Incl. results from associated companies

in m. EUR Q1/2017 Q1/2018 RoI

Ordinary investment income* 323 317 3.2%

Realised gains/losses 24 49 0.5%

Impairments/appreciations & depreciations (11) (11) -0.1%

Change in fair value of financial instruments

(through P&L)11 6 0.1%

Investment expenses (28) (28) -0.3%

NII from assets under own mgmt. 320 333 3.3%

NII from funds withheld 73 59

Total net investment income 393 391

31 Dec 17 31 Mar 18

On-balance sheet 1,159 740

thereof Fixed income AFS 706 334

Off-balance sheet 489 438

thereof Fixed income HTM, L&R 315 290

Total 1,648 1,177

Unrealised gains/losses of investments

YTD

Ordinary income from fixed income,

private equity and real estate exactly at

last year´s level; slight decrease due to

last year´s dividends from listed equities

Result from realisations out of slightly

changed investment strategy

Impairments only taken on private

equity; major portion still due to regular

depreciation on real estate

Decrease in unrealised gains due to

higher USD and GBP interest rate levels

as well as higher risk spreads on

European and US corporates

Q1/2018


Target Matrix

72

Business group Key figuresStrategic targets for

2018Q1/2018

Group Return on investment1) ≥ 2.7% 3.4%

Return on equity2) ≥ 9.5% 13.0%

Earnings per share growth (y-o-y) ≥ 5% 3.3%

Economic value creation3) ≥ 6.5% n.a.

Solvency ratio4) ≥ 200% 260.0%

Property & Casualty R/I Gross premium growth5) 3% - 5% 38.8%

Combined ratio6) ≤ 96% 95.9%

EBIT margin7) ≥ 10% 14.0%

xRoCA8) ≥ 2% n.a.

Life & Health R/I Gross premium growth9) 3% - 5% 9.2%

Value of New Business (VNB)10) ≥ EUR 220 m. n.a.

EBIT growth ≥ 5% 6.9%

xRoCA8) ≥ 2% n.a.

1) Excl. effects from ModCo derivatives 2) After tax; target: 900 bps above 5-year average return of 10-year German government bonds

3) Growth in economic equity + paid dividend; target: 600 bps above 4) According to our internal capital model and Solvency II requirements; as of 31 December 2017

5-year average return of 10-year German government bonds 5) On average throughout the R/I cycle; at constant f/x rates

6) Incl. expected net major losses 7) EBIT/net premium earned

8) Excess return on allocated economic capital 9) Organic growth only; annual average growth (5-year period), at constant f/x rates


Q1/2018


Our strategic business groups at a glance

73

Q1/2018 vs. Q1/2017

in m. EUR Q1/2017 Q1/2018 Δ Q1/2017 Q1/2018 Δ Q1/2017 Q1/2018 Δ

Gross written premium 2,815 3,579 +27.1% 1,732 1,766 +2.0% 4,547 5,345 +17.6%

Net premium earned 2,166 2,425 +12.0% 1,572 1,574 +0.1% 3,738 3,999 +7.0%

Net underwriting result 91 92 +1.2% (114) (55) -52.1% (23) 37 -

Net underwritung result incl. funds withheld 96 100 +4.0% (46) (4) -91.9% 49 96 +93.7%

Net investment income 243 268 +10.1% 148 123 -17.2% 393 391 -0.4%

From assets under own management 238 260 +9.2% 81 72 -10.7% 320 333 +4.0%

From funds withheld 5 8 +52.7% 68 51 -25.0% 73 59 -19.5%

Other income and expenses (24) (21) -14.0% 55 28 -50.0% 30 5 -82.5%

Operating profit/loss (EBIT) 310 339 +9.4% 90 96 +6.9% 400 434 +8.5%

Interest on hybrid capital 0 0 - 0 (0) - (18) (18) +0.1%

Net income before taxes 310 339 +9.4% 90 96 +6.9% 382 416 +8.9%

Taxes (77) (79) +3.0% (25) (44) +73.1% (96) (117) +21.9%

Net income 233 260 +11.5% 64 52 -19.4% 286 299 +4.5%

Non-controlling interest 18 25 +41.0% 4 1 -79.7% 22 26 +20.3%

Group net income 215 235 +9.0% 61 51 -15.7% 265 273 +3.3%

Retention 88.6% 91.6% 91.3% 90.7% 89.6% 91.3%

Combined ratio (incl. interest on funds withheld) 95.6% 95.9% 102.9% 100.2% 98.7% 97.6%

EBIT margin (EBIT / Net premium earned) 14.3% 14.0% 5.7% 6.1% 10.7% 10.8%

Tax ratio 24.7% 23.3% 28.4% 45.9% 25.1% 28.1%

Earnings per share (in EUR) 1.79 1.95 0.50 0.42 2.20 2.27

Property & Casualty R/I Life & Health R/I Total

Q1/2018


Revised guidance for 2018

74

1) At unchanged f/x rates

2) Subject to no major distortions in capital markets and/or major losses in 2018 not exceeding the large loss budget of EUR 825 m.

3) Excluding effects from ModCo derivatives

4) Relative to group net income according to IFRS

Hannover Re Group

Gross written premium1) more than 10% growth

Return on investment2) 3) at least 2.7%

Group net income2) more than EUR 1 bn.

Dividend payout ratio4) 35% - 40%

(If comfortable level of capitalisation remains unchanged, this ratio will increase

through payment of another special dividend)

Outlook 2018


Lines of business Volume1)

Profitability2)

North America3) +

Continental Europe3) +

Marine +/-

Aviation -

Credit, surety and political risks +

UK, Ireland, London market and direct +/-

Facultative reinsurance +

Worldwide treaty3)

reinsurance +/-

Cat XL +/-

Structured reinsurance and ILS +/-

Overall profitability above margin requirements

75

Good growth opportunities in several lines of business

Target

markets

Specialty

lines

worldwide

Global

reinsurance

1) In EUR, development in original currencies can be different

2) ++ = well above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)

3) All lines of business except those stated separately

Outlook 2018


Good underlying profitability in L&H business

76

Further strains from legacy US mortality business expected in 2018

1) In EUR, development in original currencies can be different

2) ++ = well above CoC; + = above CoC; +/- = CoC earned; - = below Cost of Capital (CoC)

Reporting categories Volume1)

Profitability2)

Financial solutions ++

Longevity +/-

Mortality -

Morbidity +/-

Financial

solutions

Risk

solutions

Outlook 2018


Rationale for our short- and medium-term outlook

77

Attractive earnings contribution

from US Financial solutions

business

Inforce management in US

mortality business could impact

EBIT contribution in 2018 due

to recaptures

EBIT expectation for

2018: ~EUR 200 m.

Above-target VNB development

and inforce management are

the basis for IFRS profit growth

from 2019 onwards

Normalised ordinary

investment income expected

at absolute

level on average of past 5

years

Medium-term growth expected

due to increase in AuM

supported by positive cash

flow and increasing

reinvestment

yields

L&H reinsurance InvestmentsP&C reinsurance

Improved rates should

support C/R target ≤96%

without the need to

significantly reduce

confidence level of the loss

reserves

Strong market position and

financial strength enable us

to outgrow the market

Increasing profits (EBIT) in

the medium term

Stable Return on Investment in

a low yield environmentPositioned to outperform

Outlook 2018


Financial calender and our Investor Relations contacts

Hannover Rück SE | Karl-Wiechert-Allee 50 | 30625 Hannover, Germany | www.hannover-re.com

Annual Results

Press Conference and Analysts’ Conference

7 March 2019

Quarterly Statement as at 30 September 2018

8 November 2018

Investors’ Day 2018

18 October 2018

Half-yearly Report as at 30 June 2018

9 August 2018

1 January P&C Treaty Renewals

5 February 2019

I

Karl Steinle

General Manager

Tel: +49 511 5604 - 1500

[email protected]

Axel Bock

Investor Relations Manager

Tel: +49 511 5604 - 1736

[email protected]

Julia Hartmann

Senior Investor Relations Manager

Tel: +49 511 5604 - 1529

[email protected]

Appendix


Basic information on the Hannover Re share

II

Basic information

International Securities Identification Number (ISIN) DE 000 840 221 5

Ticker symbols

- Bloomberg HNR1

- Thomson Reuters HNRGn

- ADR HVRRY

Exchange listings

- GermanyXetra, Frankfurt, Munich, Stuttgart, Hamburg, Berlin, Düsseldorf,

Hannover (official trading: Xetra, Frankfurt and Hannover)

- USAAmerican Depositary Receipts

(Level 1 ADR programme; 2 ADR = 1 share)

Market segment Prime Standard

Index inclusion MDAX

First listed 30 November 1994

Number of issued shares* 120,597,134

Common shares* EUR 120,597,134

Share class No-par-value registered shares


Appendix


List of abbreviations

III

A

ABS Asset-Backed Securities

ADR American Depositary Receipts

AFS Available-For-Sale

AG Aktiengesellschaft (public company)

AuM Assets under Management

B

BAT Block Assumption Transactions

biz business

bn. billion

bps basis points

b/s balance sheet

C

CAGR Compound Annual Growth Rate

Cat catastrophe

C/R Combined Ratio

D

E

EBIT Earnings Before Interest and Taxes

ECM Economic Capital Model

EPS Earnings per share

ESG Environmental, Social, Governance

F

G

GIIPS Greece, Ireland, Italy, Portugal, Spain

GWP Gross Written Premium

H

HR Hannover Re

HTM Held-To-Maturity

I

IFRS International Financial Reporting Standards

ILS Insurance-Linked Securities

IPO Initial Public Offering

ISIN International Securities Identification Number

IVC Intrinsic Value Creation

J, K

L

L&R Loans & Receivables

LoC Letter of Credit

LPT Loss Portfolio Transfer

M

m. million

MCEV Market Consistent Embedded Value

MCR Minimum Capital Requirements

mgmt. management

ModCo Modified Coinsurance

MtCR Maximum tolerable Combined Ratio

N

n.a. not available

NC non-callable

NII Net Investment Income

NPE Net Premium Earned

O

OCI Other Comprehensive Income

P

P&L profit and loss

p.a. per annum

Perp perpetual

prop. proportional

Q

R

R/I Reinsurance

RoE Return on Equity

RoI Return on Investment

S

S&P Standard & Poor's

SCR Solvency Capital Requirements

SE Societas Europaea (European Company)

T

U

U/Y underwriting year

U/W Underwriting

V

V.a.G. Versicherungsverein auf Gegenseitigkeit (mutual insurance company)

VaR Value at Risk

VNB Value of New Business

W

WACC Weighted Average Cost of Capital

X

XL eXcess of Loss

xRoCA eXcess Return on Capital Allocated

Y

YTD Year To Date

y-o-y year-on-year

Z

Appendix


Details on reserve review by Willis Towers Watson

IV

The scope of Willis Towers Watson’s work was to review certain parts of the held loss and loss adjustment expense reserve, net of outwards reinsurance, from Hannover Rück SE’s

consolidated financial statements in accordance with IFRS as at each 31 December from 2009 to 2015, and the implicit redundancy margin, for the non-life business of Hannover Rück

SE. Willis Towers Watson concludes that the reviewed loss and loss adjustment expense reserve, net of reinsurance, less the redundancy margin is reasonable in that it falls within Willis

Towers Watson’s range of reasonable estimates.

• Life reinsurance and health reinsurance business are excluded from the scope of this review.

• Willis Towers Watson’s review of non-life reserves as at 31 December 2015 covered 98.2% / 98.1% of the gross and net held non-life reserves of €22.8 billion and € 21.8 billion

respectively. Together with life reserves of gross €3.7 billion and net €3.4 billion, the total balance sheet reserves amount to €26.6 billion gross and €25.2 billion net.

• The results shown in this presentation are based on a series of assumptions as to the future. It should be recognised that actual future claim experience is likely to deviate, perhaps

materially, from Willis Towers Watson’s estimates. This is because the ultimate liability for claims will be affected by future external events; for example, the likelihood of claimants

bringing suit, the size of judicial awards, changes in standards of liability, and the attitudes of claimants towards the settlement of their claims.

• The results shown in Willis Towers Watson’s reports are not intended to represent an opinion of market value and should not be interpreted in that manner. The reports do not

purport to encompass all of the many factors that may bear upon a market value.

• Willis Towers Watson’s analysis was carried out based on data as at evaluation dates for each 31 December from 2009 to 2015. Willis Towers Watson’s analysis may not reflect

development or information that became available after the valuation dates and Willis Towers Watson’s results, opinions and conclusions presented herein may be rendered

inaccurate by developments after the valuation dates.

• As is typical for reinsurance companies, the claims reporting can be delayed due to late notifications by some cedants. This increases the uncertainty in the estimates.

• Hannover Rück SE has asbestos, environmental and other health hazard (APH) exposures which are subject to greater uncertainty than other general liability exposures. Willis

Towers Watson’s analysis of the APH exposures assumes that the reporting and handling of APH claims is consistent with industry benchmarks. However, there is wide variation in

estimates based on these benchmarks. Thus, although Hannover Rück SE’s held reserves show some redundancy compared to the indications, the actual losses could prove to be

significantly different to both the held and indicated amounts.

• Willis Towers Watson has not anticipated any extraordinary changes to the legal, social, inflationary or economic environment, or to the interpretation of policy language, that might

affect the cost, frequency, or future reporting of claims. In addition, Willis Towers Watson’s estimates make no provision for potential future claims arising from causes not

substantially recognised in the historical data (such as new types of mass torts or latent injuries, terrorist acts), except in so far as claims of these types are included incidentally in

the reported claims and are implicitly developed.

• In accordance with its scope Willis Towers Watson’s estimates are on the basis that all of Hannover Rück SE’s reinsurance protection will be valid and collectable. Further liability

may exist for any reinsurance that proves to be irrecoverable.

• Willis Towers Watson’s estimates are in Euros based on the exchange rates provided by Hannover Rück SE as at each 31 December evaluation date. However, a substantial

proportion of the liabilities is denominated in foreign currencies. To the extent that the assets backing the reserves are not held in matching currencies, future changes in exchange

rates may lead to significant exchange gains or losses.

• Willis Towers Watson has not attempted to determine the quality of Hannover Rück SE’s current asset portfolio, nor has Willis Towers Watson reviewed the adequacy of the balance

sheet provisions except as otherwise disclosed herein.

In its review,Willis Towers Watson has relied on audited and unaudited data and financial information supplied by Hannover Rück SE and its subsidiaries, including information provided

orally. Willis Towers Watson relied on the accuracy and completeness of this information without independent verification.

Except for any agreed responsibilities Willis Towers Watson may have to Hannover Rück SE, Willis Towers Watson does not assume any responsibility and will not accept any liability to

any person for any damages suffered by such person arising out of this commentary or references to Willis Towers Watson in this document.

Appendix


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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