Hannover Rueck SE

Investor Presentation • May 5, 2021

Conference Call on Q1/2021 financial results

Hannover, 5 May 2021

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance
• Investments
• Target Matrix

Outlook 2021

Appendix

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance

Investments

Target Matrix

Outlook 2021

Appendix

Group net income in line with full-year guidance Strong premium growth of 12%; RoE well above target

Very strong operating cash flow driven by profitable premium growth AuM +6.7%, cash flow and f/x effects more than offset lower asset valuation

Shareholders' equity slightly up by 0.4%

Net income and positive currency translation offset decreased valuation reserves

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance

Investments

Target Matrix

Outlook 2021

Appendix

Continued strong growth in an improving market environment Underwriting result in line with expectation, Covid-19 net loss estimate unchanged

Property & Casualty R/I in m. EUR	Q1/2020	Q1/2021	Δ
Gross written premium	4,986	5,693	+14.2%
Net premium earned	3,338	3,863	+15.7%
Net underwriting result incl. funds withheld	7	147	-
Combined ratio incl. interest on funds withheld	99.8%	96.2%	-
Net investment income from assets under own management	286	268	-6.3%
Other income and expenses	11	(91)	-
Operating profit/loss (EBIT)	305	324	+6.3%
Tax ratio	29.4%	12.9%	-
Group net income	207	269	+29.9%
Earnings per share (in EUR)	1.72	2.23	+29.9%

• YTD
• GWP f/x-adjusted +20.1%, diversified growth from traditional and Structured Reinsurance business; growth supported by strong premium run-off from U/Y 2020
• NPE f/x-adjusted +21.5%
• Major losses of EUR 193 m. (5.0% of NPE) below budget of EUR 214 m. for Q1/2021; Covid-19 net loss estimates unchanged vs. year-end 2020
• Unchanged conservative reserving approach
• Net investment income decreased primarily due to lower realised gains
• Other income and expenses mainly impacted by negative currency effects (Q1/2021: EUR -82 m.)
• Lower tax ratio predominantly due to favourable earnings contribution from lower-tax subsidiaries

Large losses of EUR 193 m. within budget of EUR 214 m. for Q1/2021

Natural and man-made catastrophe losses1) in m. EUR

9 Conference Call on Q1/2021 financial results

Q1/2021 mainly impacted by Texas winter storm and man-made losses

Q1/2021 mainly impacted by Texas winter storm and man-made losses
Catastrophe losses1 ) in m. EUR	Date	Gross	Net
Storm "Filomena", Spain	7 - 8 Jan	10.1	10.1
Texas winter storm/freeze, USA	11 - 21 Feb	135.4	75.4
Floods, Australia	18 - 23 Mar	19.5	19.5
3 Natural catastrophes		164.9	105.0
1 Aviation loss		13.5	13.5
4 Property losses		74.6	74.6
5 Man-made losses		88.2	88.2
8 Major losses		253.1	193.2

1) Natural catastrophes and other major losses in excess of EUR 10 m. gross Large loss budget 2021: EUR 1,100 m. thereof EUR 225 m. man-made and EUR 875 m. NatCat

Combined ratios in line with expectations

Q1/2021: Combined Ratio vs. target combined ratios

1) All lines of Property & Casualty reinsurance except those stated separately; EMEA incl. CIS

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance
• Investments
• Target Matrix

Outlook 2021

Appendix

Favourable premium growth

Results impacted by Covid-19 pandemic; partly offset by one-off effect of EUR 129 m.

Life & Health R/I in m. EUR	Q1/2020	Q1/2021	Δ
Gross written premium	1,989	2,110	+6.1%
Net premium earned	1,753	1,824	+4.0%
Net underwriting result incl. funds withheld	(52)	(125)	+140.2%
Net investment income from assets under own management	99	45	-54.7%
Other income and expenses	77	160	+108.2%
Operating profit/loss (EBIT)	124	80	-35.6%
EBIT margin	7.1%	4.4%	-
Tax ratio	10.5%	37.9%	-
Group net income	110	49	-55.7%
Earnings per share (in EUR)	0.91	0.40	-55.7%

YTD

• GWP f/x-adjusted +8.6%, mainly from APAC and Longevity
• NPE f/x-adjusted growth +6.7%
• Technical result impacted by Covid-19 losses of EUR 151 m. (thereof US: EUR 105 m.), positive one-off from restructuring within US mortality portfolio (EUR 86 m.)
• Net investment income decreased primarily due to negative impact from fair value of derivatives and negative one-off effect from restructuring within US mortality portfolio (EUR -14 m.)
• Other income and expenses increased due to positive one-off effect from restructuring within US mortality portfolio (EUR 58 m.) and strong contribution from deposit accounted treaties of EUR 90 m. (Q1/2020: EUR 85 m.)
• High tax ratio driven by extraordinary effect and relatively low relief from subsidiaries in countries with lower tax ratios

Promising new business pipeline for 2021 Q1/2021 new and pipeline business1)

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance

Investments

Target Matrix

Outlook 2021

Appendix

Return on Investment slightly above expectations

NII mainly decreased due to lower realised gains and negative derivative valuation

in m. EUR	Q1/2020	Q1/2021	RoI
Ordinary investment income1)	333	325	2.6%
Realised gains/losses	102	90	0.7%
Impairments/appreciation & depreciation	(29)	(21)	-0.2%
Change in fair value of financial instruments (through P&L)	12	(50)	-0.4%
Investment expenses	(32)	(31)	-0.2%
NII from assets under own management	386	313	2.5%
NII from funds withheld	86	131
Total net investment income	472	444

Unrealised gains/losses on investments	31 Dec 20	31 Mar 21
On-balance sheet	3,019	2,154
thereof Fixed income AFS	2,347	1,364
Off-balance sheet	557	645
thereof Fixed income HTM, L&R	217	163
Total	3,576	2,799

YTD

• Returns from alternative investments almost compensate for lower ordinary income from fixed-income securities (partially from inflationlinked bonds due to lower inflation)
• Realised gains include disposal of parts of listed-equity portfolio as well as some reallocations due to regular portfolio adjustments
• Stable depreciation of direct real estate investments; impairments of private equity and high yield funds as well as real estate funds slightly higher, but on very moderate level
• Decrease in valuation reserves due to significantly higher minimal-risk yield curves, credit spreads on corporates rather stable; higher valuations in alternative investments

1) Incl. results from associated companies

Ordinary return continuously supported by alternative assets Slightly higher share of corporates, partial disposal of listed equities

1)

Investment category	2017	2018	2019	2020	Q1/2021
Fixed-income securities	87%	87%	87%	85%	85%
- Governments	30%	35%	35%	34%	33%
- Semi-governments	17%	16%	15%	15%	14%
- Corporates	32%	29%	31%	30%	32%
Investment grade	27%	25%	26%	25%	27%
Non-investment grade	5%	4%	4%	5%	5%
- Pfandbriefe, Covered bonds, ABS	8%	7%	7%	6%	2) 6%
Equities	2%	2%	3%	3%	3%
- Listed equity	<1%	<1%	<1%	1%	1%
- Private equity	2%	2%	2%	3%	3%
Real Assets	5%	6%	5%	5%	5%
Others	1%	1%	2%	3%	3%
Short-term investments & cash	4%	4%	3%	3%	4%
Total market values in bn. EUR	40.5	42.7	48.2	49.8	53.2

Asset allocation Ordinary income split

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 1,343.3 m. (EUR 1,275.6 m.) as at 31 March 2021

2) Of which Pfandbriefe and Covered Bonds = 64.8%

3) Before real estate-specific costs. Economic view based on market values as at 31 March 2021

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance
• Investments
• Target Matrix
• Outlook 2021
• Appendix

Target Matrix: Q1/2021 Strategy cycle 2021 - 2023

Business group	Key figures	Strategic targets	Q1/2021
Group	Return on equity1 )	900 bps above risk-free	11.1%
	Solvency ratio2 )	≥ 200%	252%
Property & Casualty reinsurance	Gross premium growth3 )	≥ 5%	+20.1%
	EBIT growth4 )	≥ 5%	+6.3%
	Combined ratio	≤ 96%	96.2%
	xRoCA5 )	≥ 2%	n.a. yet
Life & Health reinsurance	Gross premium growth3 )	≥ 3%	+8.6%
	EBIT growth4 )	≥ 5%	-35.6%
	Value of New Business (VNB)6 )	≥ EUR 250 m.	n.a. yet
	xRoCA5 )	≥ 2%	n.a. yet

1) After tax; risk-free: 5-year average return of 10-year German government bonds 2) According to our internal capital model and Solvency II requirements

3) Average annual growth at constant f/x rates 4) Average annual growth

5) Excess return (one-year economic profit in excess of the cost of capital) on allocated economic capital 6) Based on Solvency II principles; pre-tax reporting

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance
• Investments
• Target Matrix

Outlook 2021

Appendix

Positive renewal trends lead to continued premium growth Risk-adjusted price increase of 9.0% in non-proportional business

2 Jan - 1 Apr 2021

1) Excluding specialty business mentioned separately

Americas1)

• Double-digit increase in premium in North America
  • Strong (double-digit) primary rate movement continues in targeted segments (Excess & Surplus lines, large accounts, engineered risks)
  • Reinsurers' margin on proportional business has improved as underlying rate trends outweigh loss cost and commission developments
• Stable to improved conditions in the Caribbean

Japan

• Successful renewal in line with our expectations. Portfolio has been renewed with a singledigit growth rate
• We were able to continue and partially increase our participation on business that has seen 3 successive rounds of rate increases

Aviation & Marine

• Aviation: Positive price momentum continued with risk-adjusted price increases averaging around 25% and in line with 1/1 renewals
• Marine: Single-digit price increases on loss-free and higher on loss-affected business. Cyber and Communicable Disease exclusionary language incorporated successfully

Agricultural Risks

Underwriting year figures at unchanged f/x rates (31 December 2020) • Renewals still underway; premium growth expected from new accounts

| 1 | 2 | 3 | 4 | 5 | 6 Outlook 2021 | 7 |

Growing Property & Casualty portfolio at attractive profitability Financial year 2021

	Reporting categories	Volume1)	Profitability2)
Regional markets	EMEA3)		+
	Americas3)		+
	APAC3)		+/-
Worldwide markets	Structured Reinsurance and ILS		++
	Credit, Surety and Political Risks		+/-
	Facultative Reinsurance		+
	Aviation and Marine		+
	Agricultural Risks		+

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; EMEA incl. CIS

Profitability in Life & Health still impacted by Covid-19 Financial year 2021

Reporting categories	Volume1)	Profitability2)
Financial solutions	3)	++
Longevity		+
Mortality		-
Morbidity		+/-

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

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

3) Business volume including contracts not reflected in premium income

Guidance for 2021

Hannover Re Group

•	Gross written premium1)	high single-digit growth
•	Return on investment2) 3)	~ 2.4%
•	Group net income2)	EUR 1.15 - 1.25 bn.
•	Ordinary dividend pay-out ratio4)	35% - 45%

• Special dividend additional pay-out if profit target is reached and capitalisation is comfortable

1) At unchanged f/x rates

2) Subject to no major distortions in capital markets and/or major losses in 2021 not exceeding the large loss budget of EUR 1.1 bn.

3) Excluding effects from ModCo derivatives

4) Relative to Group net income according to IFRS

Group overview

• Property & Casualty reinsurance
• Life & Health reinsurance
• Investments
• Target Matrix
• Outlook 2021
• Appendix

Strong capital generation despite Covid-19 impacts Solvency II ratio declines but remains at high level

Solvency II movement analysis

Figures in m. EUR. SCR – Solvency Capital Requirements according to Solvency II internal model

1) Model changes (pre-tax) in terms of own funds relate to the calculation of technical provisions. A number of minor model changes, with each of them having a rather small impact, affect the SCR.

2) Operating earnings and assumption changes (pre-tax). The own funds increase includes the L&H new business value of EUR 778 m. The SCR increases due to strong business growth.

3) Changes due to movements in foreign exchange rates, in particular the depreciation of the US Dollar, lower interest rates, increased credit spreads and changes in other financial market indicators (pre-tax).

4) Incl. tax payments and changes in deferred taxes

5) Incl. dividend payments and changes in foreseeable dividends. The hybrid bond with call date in 2020 has been replaced.

Our strategic business groups at a glance Q1/2021 vs. Q1/2020

	Property & Casualty R/I		Life & Health R/I		Total
in m. EUR	Q1/2020	Q1/2021	Q1/2020	Q1/2021	Q1/2020	Q1/2021
Gross written premium	4,986	5,693	1,989	2,110	6,975	7,803
Net premium earned	3,338	3,863	1,753	1,824	5,091	5,687
Net underwriting result	(3)	144	(127)	(252)	(130)	(108)
Net underwriting result incl. funds withheld	7	147	(52)	(125)	(45)	22
Net investment income	296	271	175	172	472	444
From assets under own management	286	268	99	45	386	313
From funds withheld	10	4	75	127	86	131
Other income and expenses	11	(91)	77	160	85	68
Operating profit/loss (EBIT)	305	324	124	80	427	404
Financing costs	(1)	(1)	(0)	(0)	(23)	(19)
Net income before taxes	304	323	124	80	403	385
Taxes	(89)	(42)	(13)	(30)	(94)	(66)
Net income	215	282	111	49	309	319
Non-controlling interest	8	13	1	1	8	13
Group net income	207	269	110	49	301	306
Retention	91.7%	92.6%	89.4%	88.6%	91.1%	91.5%
Combined ratio (incl. interest on funds withheld)	99.8%	96.2%	-	-	-	-
EBIT margin (EBIT / Net premium earned)	9.1%	8.4%	7.1%	4.4%	8.4%	7.1%
Tax ratio	29.4%	12.9%	10.5%	37.9%	23.4%	17.1%
Earnings per share (in EUR)	1.72	2.23	0.91	0.40	2.49	2.54

Stress tests on assets under own management

Focus still on credit exposures with ambitious spread tightenings

Portfolio	Scenario	Change in market value in m. EUR	Change in OCI before tax in m. EUR
	-10%	-170	-170
Equity (listed and private equity)	-20%	-341	-341
	+50 bps	-1,306	-1,243
Fixed-income securities	+100 bps	-2,538	-2,417
Credit spreads	+50%	-753	-738

High-quality fixed-income book well balanced

High-quality fixed-income book well balanced Geographical allocation mainly in accordance with our broad business diversification
	Governments	Semi governments	Corporates	Pfandbriefe, Covered bonds, ABS	Short-term investments, cash	Total
AAA	75%	60%	1 %	59%	-	44%
A A	8 %	24%	12%	17%	-	13%
A	11%	7 %	33%	13%	-	19%
BBB	4 %	2 %	45%	8 %	-	19%
<BBB	2 %	8 %	11%	2 %	-	6 %
Total	100%	100%	100%	100%	-	100%
Germany	18%	32%	4 %	18%	22%	16%
UK	6 %	2 %	7 %	8 %	16%	6 %
France	1 %	1 %	7 %	7 %	1 %	4 %
GIIPS	1 %	1 %	4 %	5 %	0 %	2 %
Rest of Europe	4 %	18%	14%	25%	3 %	11%
USA	48%	14%	32%	14%	16%	33%
Australia	5 %	6 %	6 %	11%	10%	6 %
Asia	13%	9 %	10%	1 %	22%	11%
Rest of World	4 %	16%	15%	11%	9 %	11%
Total	100%	100%	100%	100%	100%	100%
Total b/s values in m. EUR	17,284	7,605	16,318	3,182	2,045	46,433

IFRS figures as at 31 March 2021

Currency allocation matches modelled liability profile Strict duration-neutral strategy continued

Currency split of investments

• Modified duration of fixed-income mainly congruent with liabilities and currencies
• GBP's higher modified duration predominantly due to life business; EUR driven by hybrid bond issuance

Modified duration
Q1/2021	5.7
2020	5.8
2019	5.7
2018	4.8
2017	4.8

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-todate, 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.

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