Hannover Rueck SE

Investor Presentation • Mar 13, 2025

Hannover Re

Conference Call on 2024 Annual Results

Hannover, 13 March 2025
somewhat diygerent

2 Property \& Casualty reinsurance

3 Life \& Health reinsurance
4 Investments
5 Guidance 2025
6

Appendix

Group overview

Delivering on raised Group net income guidance

Total dividend proposal increased by $25 \%$ to 9.00 EUR

Figures in EUR unless otherwise stated

1) At unchanged $f / x$ rates
2) Subject to no major distortions in capital markets and/or major losses not exceeding the large loss budget of EUR 1,825 bn. in 2024
3) Cost (directly + non-directly attributable) / Reinsurance revenue (gross)

Increased ordinary dividend proposal reflects positive earnings trends Retained earnings will support future growth

Dividend per share in EUR

Strong increase in CSM and RA further strengthens expected earnings outlook Shareholders' equity increased by $16.5 \%$

Change in shareholders' equity

Contractual Service Margin (CSM) and Risk Adjustment (RA)

HannoverRe

Long-term track record of high and stable return on equity

RoE of $21.2 \%$ well above strategic ambition for 2024

Property $\mathcal{E}$ Casualty reinsurance

Continued strong growth in a favourable market environment Strong underlying profitability of $\mathrm{P} \Theta \mathrm{C}$ portfolio - combined ratio well within target range

Property \& Casualty R/I	Q4/2023	Q4/2024	2023	2024
Reinsurance revenue (gross)	4,088	4,726	16,824	18,665
Reinsurance revenue (net)	3,313	3,846	14,198	15,886
Reinsurance service result	$-36$	674	848	2,136
Reinsurance finance result	$-249$	$-279$	$-722$	$-945$
Investment result	222	461	1,171	1,607
Other result	55	$-206$	$-199$	$-411$
Operating profit/loss (EBIT)	$-9$	650	1,099	2,387
Combined ratio (net)	$101.1 \%$	$82.5 \%$	$94.0 \%$	$86.6 \%$
New business CSM (net)	204	265	2,368	2,733
New business LC (net)	$-1$	$-12$	$-40$	$-42$

YTD

Reinsurance revenue (RR)

• Reinsurance revenue (gross) growth +10.9\% (f/x-adjusted +11.1\%) mainly driven by Structured Reinsurance/ILS, EMEA and Americas

Reinsurance service result (RSR)

• Large losses at 1,629 m. below budget of 1,825 m.
• Reserve resiliency increased at least in line with growth in total reserves; risk adjustment increased to $\sim 1 \mathrm{bn}$.
• Overall positive run-off result from most lines of business, partly offset by unfavourable prior-year development of large losses and increase in reserve resiliency
• C/R well within target range including 7.5\% discounting effect

Reinsurance finance result

• Increase reflects movements in interest rates

Investment result

• Strong ordinary income supported by higher fixed-income yields, including 149 m. contribution from inflation-linked bonds; moderate impairments on real estate ( 37 m .)

Other result

• Currency result -143 m . ( +100 m .) , mainly affected by strengthening of USD

Strong and diversified generation of new business CSM of EUR 2,733 m.

Life \& Health reinsurance

LOH performance reflects favourable profitability

Reinsurance service result above target - strong increase in CSM and Risk Adjustment

Life \& Health R/I	Q4/2023	Q4/2024	2023	2024
Reinsurance revenue (gross)	1,854	1,952	7,633	7,715
Reinsurance revenue (net)	1,659	2,064	6,892	7,149
Reinsurance service result	133	215	810	883
Reinsurance finance result	$-29$	$-52$	$-158$	$-170$
Investment result	100	98	415	396
Other result	$-64$	$-42$	$-196$	$-175$
Operating profit/loss (EBIT)	141	218	871	934
New business CSM (net)	132	94	359	317
New business LC (net)	$-6$	12	$-14$	$-6$
NB CSM \& LC incl. extensions on existing contracts	123	210	755	618

YTD

Reinsurance revenue (RR)

• Reinsurance revenue (gross) change +1.1\% (f/x-adjusted +0.6\%), driven by Morbidity and Longevity, partly offset by US mortality run-off

Reinsurance service result (RSR)

• RSR above target of $>850 \mathrm{~m}$. despite one-off from client insolvency $(-37 \mathrm{~m}$.)
• Normalisation of mortality result (last year included one-off recapture); increased contribution from Longevity and Financial Solutions
• Morbidity mainly impacted by reserve strengthening for critical illness in China

Investment result

• Increase in ordinary income and positive impact from fair value of financial instruments ( +57 m .) mitigated by negative at-equity valuation impact $(-36 \mathrm{~m}$.)

Other result

• Currency result improved to 35 m . (-13 m.)

Growth in CSM and RA provide a strong foundation for future earnings CSM and Risk Adjustment release in line with expectations

• Strong profitability with CSM and risk-adjustment release in line with expectation
• Positive experience variances in all reporting categories
• Change in LC mainly impacted by reserve strengthening for critical illness business in China and one-off from client insolvency ( -37 m .); new business LC-6 m.

Contractual Service Margin (net)
5.950	235	317	307	176	415	6.517
CSM
31.12 .2023	Currency	New	Extensions	IFIE	Change in	Regular
	effects	business	on existing		estimates	release
			contracts			31.12.2024

• Overall successful new business generation of 624 m ., diversified contribution from Financial Solutions, Morbidity and Mortality
• Changes in estimates mainly driven by Longevity

11

Investments

RoI of 3.2\% clearly exceeds target Very resilient portfolio with minor extraordinary effects

in m. EUR	Q4/2023	Q4/2024	2023	2024	RoI
Ordinary investment income ${ }^{1)}$	539	645	1,998	2,381	$3.8 \%$
Realised gains/losses	$-96$	$-52$	$-154$	$-90$	$-0.1 \%$
Depreciations Real Assets, Impairments	$-86$	$-6$	$-133$	$-95$	$-0.2 \%$
Change in ECL	$-8$	1	$-23$	$-3$	$0.0 \%$
FVTPL - valuation ${ }^{2)}$	18	21	76	3	$0.0 \%$
Investment expenses	$-45$	$-50$	$-176$	$-190$	$-0.3 \%$
Investment result	323	560	1,588	2,005	$3.2 \%$
Unrealised gains/losses on investments (OCI)			31 Dec 23	31 Dec 24
Fixed Income			$-3,217$	$-3,299$
Equities (non-recycling)			$-1$	$-1$
Real Assets			492	529
Others (Participations etc.)			348	355
Total			$-2,378$	$-2,415$

All figures in m. EUR unless otherwise stated

1) Incl. results from associated companies
2) Fair Value Through P/L of financial instruments

YTD

• Increase in ordinary income predominantly due to higher locked-in yields and higher contribution from alternative investments; contribution from inflationlinked bonds ( 149 m .)
• Realised gains/losses driven by regular portfolio maintenance with minor changes in asset allocation
• Minor effect from change in ECL and moderate impairments on real estate ( 37 m .)
• Overall minor impact from change in fair value valuation
• Increase in asset volume mainly driven by strong operating cash flow, supported by positive f/x effects

Guidance 2025

Unchanged guidance for FY 2025

Appendix

Our business groups at a glance

2024 vs. 2023

	Property \& Casualty R/I			Life \& Health R/I			Total
Stand alone in m. EUR	2023	2024	$\Delta-\%$	2023	2024	$\Delta-\%$	2023	2024	$\Delta-\%$
Reinsurance revenue (gross)	16,824	18,665	10.9\%	7,633	7,715	$1.1 \%$	24,456	26,379	$7.9 \%$
Reinsurance service expenses	$-14,088$	$-14,893$	$5.7 \%$	$-6,714$	$-6,805$	$1.4 \%$	$-20,802$	$-21,698$	$4.3 \%$
Reinsurance service result (gross)	2,736	3,771	$37.9 \%$	919	910	$-1.0 \%$	3,654	4,681	$28.1 \%$
Reinsurance result (ceded)	$-1,887$	$-1,636$	$-13.3 \%$	$-109$	$-27$	$-75.5 \%$	$-1,996$	$-1,663$	$-16.7 \%$
Reinsurance service result	848	2,136	$151.7 \%$	810	883	$9.0 \%$	1,658	3,019	$82.0 \%$
Reinsurance finance result	$-722$	$-945$	$30.8 \%$	$-158$	$-170$	$7.7 \%$	$-880$	$-1,115$	$26.7 \%$
Investment result	1,171	1,607	$37.3 \%$	415	396	$-4.6 \%$	1,588	2,005	$26.2 \%$
Currency result	100	$-143$	$-242.9 \%$	$-13$	35	$-360.9 \%$	87	$-108$	$-224.6 \%$
Other result	$-299$	$-268$	$-10.2 \%$	$-182$	$-210$	$15.0 \%$	$-482$	$-483$	$0.3 \%$
Operating profit/loss (EBIT)	1,099	2,387	$117.3 \%$	871	934	$7.2 \%$	1,971	3,318	$68.3 \%$
Net income before taxes							1,854	3,213	$73.3 \%$
Taxes							$-26$	$-817$	-
Net income							1,828	2,397	$31.1 \%$
Non-controlling interest							3	68	-
Group net income							1,825	2,329	$27.6 \%$

Our business groups at a glance

Q4/2024 vs. Q4/2023

Stand alone in m. EUR	Property \& Casualty R/I			Life \& Health R/I			Total
	Q4/2023	Q4/2024	$\Delta-\%$	Q4/2023	Q4/2024	$\Delta-\%$	Q4/2023	Q4/2024	$\Delta-\%$
Reinsurance revenue (gross)	4,088	4,726	$15.6 \%$	1,854	1,952	$5.3 \%$	5,942	6,678	$12.4 \%$
Reinsurance service expenses	$-3,638$	$-3,546$	$-2.5 \%$	$-1,665$	$-1,713$	$2.9 \%$	$-5,303$	$-5,259$	$-0.8 \%$
Reinsurance service result (gross)	450	1,180	$162.2 \%$	189	239	$26.3 \%$	639	1,419	$121.9 \%$
Reinsurance result (ceded)	$-486$	$-506$	$4.0 \%$	$-56$	$-25$	$-56.0 \%$	$-543$	$-530$	$-2.3 \%$
Reinsurance service result	$-36$	674	-	133	215	$61.2 \%$	97	889	-
Reinsurance finance result	$-249$	$-279$	$11.8 \%$	$-29$	$-52$	$83.6 \%$	$-278$	$-331$	$19.2 \%$
Investment result	222	461	$107.6 \%$	100	98	$-2.0 \%$	323	560	$73.5 \%$
Currency result	113	$-155$	$-236.2 \%$	$-19$	14	$-177.1 \%$	95	$-140$	$-247.7 \%$
Other result	$-59$	$-51$	$-12.8 \%$	$-45$	$-57$	$25.2 \%$	$-102$	$-107$	$5.3 \%$
Operating profit/loss (EBIT)	$-9$	650	-	141	218	$54.6 \%$	134	869	-
Net income before taxes							108	843	-
Taxes							292	$-299$	$-202.6 \%$
Net income							400	544	$35.9 \%$
Non-controlling interest							$-25$	39	$-255.4 \%$
Group net income							425	504	$18.6 \%$

Large losses below budget of EUR 1,825 m.

Natural and man-made catastrophe losses in excess of EUR 10 m. gross

Large losses from natural catastrophes within budget despite high frequency of NatCat events

Catastrophe losses ${ }^{1)}$ in m. EUR	Date	Gross	Net
Earthquake, Japan	2 Jan	25.3	22.3
Wildfire, Chile	2-11 Feb	12.4	7.6
Earthquake, Taiwan	3 Apr	36.5	36.5
Flood, Dubai	14-17 Apr	141.2	138.0
Storm / flood / hurricane, US	25 Apr - 2 May	37.2	33.7
Flood, Brazil	28 Apr - 15 May	85.4	85.3
Storm / tornadoes, US	6-10 May	14.3	8.9
Storm / hurricane, US	15-21 May	35.0	27.9
Flood, Germany	31 May - 6 Jun	78.5	52.8
Hurricane "Beryl", US, Caribbean	29 Jun - 9 Jul	93.9	73.7
Storm "Frieda", Western Europe	10-13 Jul	15.0	7.8
Wildfire, Canada	22 Jul - 17 Aug	35.1	25.0
Hailstorm, Canada	5-6 Aug	152.1	87.8
Hurricane "Debby", US, Canada	5-11 Aug	90.7	50.1
Typhoon "Yagi", East Asia	1-7 Sep	38.4	38.4
Flood, Europe	12-16 Sep	206.4	193.9
Hurricane "Helene", US	24-29 Sep	188.9	116.2
Hurrican "Milton", US	7-10 Oct	596.1	230.0
Flood, Spain	27 Oct - 16 Nov	27.9	27.9
19 Natural catastrophes		1,910.3	1,263.8

1) Major losses in excess of EUR 10 m . gross

Large loss budget 2024: EUR 1,625 m., thereof EUR 300 m . man-made and EUR 1,525 m. NatCat

Man-made large losses above budget of EUR 300 m.

Catastrophe losses $^{1)}$ in m. EUR	Date	Gross	Net
19 Natural catastrophes		1,910.3	1,263.8
2 Aviation losses		27.1	26.5
1 Credit loss		10.7	10.7
8 Property losses		243.0	225.6
Baltimore Bridge, US		314.7	102.6
12 Man-made losses		595.5	365.4
31 Major losses		2,505.8	1,629.2

1) Major losses in excess of EUR 10 m . gross

Large loss budget 2024: EUR 1,625 m., thereof EUR 300 m. man-made and EUR 1,525 m. NatCat

Moderate increase in credits utilising selective market opportunities

Asset class	2019	2020	2021	2022	2023	2024
Fixed Income	87\%	85\%	86\%	83\%	85\%	86\%
Governments	$42 \%$	$42 \%$	$40 \%$	$42 \%$	$41 \%$	$38 \%$
Semi-governments	$8 \%$	$7 \%$	$8 \%$	$8 \%$	$9 \%$	$10 \%$
Corporates	$31 \%$	$30 \%$	$32 \%$	$27 \%$	$29 \%$	$32 \%$
Investment grade	$26 \%$	$25 \%$	$28 \%$	$23 \%$	$25 \%$	$27 \%$
Non-Investment grade	$4 \%$	$4 \%$	$4 \%$	$4 \%$	$4 \%$	$4 \%$
Covered Bonds	$4 \%$	$4 \%$	$4 \%$	$4 \%$	$4 \%$	$4 \%$
ABS/MBS/CDO	$2 \%$	$2 \%$	$2 \%$	$3 \%$	$3 \%$	$3 \%$
Equities	$3 \%$	$3 \%$	$4 \%$	$3 \%$	$3 \%$	$3 \%$
Listed	$<0.1 \%$	$1 \%$	$1 \%$	$0 \%$	$0 \%$	$0 \%$
Private Equities	$2 \%$	$3 \%$	$3 \%$	$3 \%$	$3 \%$	$3 \%$
Real Assets (without Infra-Debt)	$5 \%$	$5 \%$	$5 \%$	$7 \%$	$7 \%$	$7 \%$
Others	$2 \%$	$3 \%$	$2 \%$	$3 \%$	$3 \%$	$2 \%$
Cash/STI	$3 \%$	$3 \%$	$3 \%$	$3 \%$	$2 \%$	$2 \%$
MV AuM in EUR bn. ${ }^{1)}$	48.2	49.8	56.2	57.4	60.6	66.4

[^0]
[^0]: Economic view based on market values without outstanding commitments for Private Equity and Alternative Real Estate as well as fixed-income investments of EUR 1,909.0 m. (EUR 1,161.6 m.) as at 31 December 2024 1) 2019 - 2022 IAS 39 incl. Cash / >2023 IFRS9 excl. Cash

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	$24 \%$	$53 \%$	$1 \%$	$66 \%$	-	$24 \%$
AA	$58 \%$	$25 \%$	$9 \%$	$8 \%$	-	$31 \%$
A	$11 \%$	$8 \%$	$41 \%$	$9 \%$	-	$21 \%$
BBB	$5 \%$	$2 \%$	$39 \%$	$14 \%$	-	$17 \%$
<BBB	$3 \%$	$12 \%$	$10 \%$	$3 \%$	-	$7 \%$
Total	$100 \%$	$100 \%$	$100 \%$	$100 \%$	-	$100 \%$
Germany	$18 \%$	$23 \%$	$9 \%$	$16 \%$	$8 \%$	$15 \%$
UK	$6 \%$	$5 \%$	$9 \%$	$5 \%$	$7 \%$	$7 \%$
France	$3 \%$	$1 \%$	$6 \%$	$9 \%$	$0 \%$	$4 \%$
GIIPS	$0 \%$	$0 \%$	$6 \%$	$2 \%$	$0 \%$	$2 \%$
Rest of Europe	$4 \%$	$14 \%$	$15 \%$	$24 \%$	$12 \%$	$11 \%$
USA	$48 \%$	$16 \%$	$29 \%$	$21 \%$	$26 \%$	$33 \%$
Australia	$5 \%$	$8 \%$	$8 \%$	$9 \%$	$5 \%$	$7 \%$
Asia	$12 \%$	$14 \%$	$8 \%$	$0 \%$	$32 \%$	$11 \%$
Rest of World	$5 \%$	$19 \%$	$11 \%$	$15 \%$	$9 \%$	$10 \%$
Total	$100 \%$	$100 \%$	$100 \%$	$100 \%$	$100 \%$	$100 \%$
Total b/s values in m. EUR	22,059	9,771	20,265	4,332	1,366	57,793

Favourable ordinary income with normalised contribution from Alternatives and fixed income Higher locked-in interest rates stabilising

Asset class	2022	2023	2024
Fixed Income	$83 \%$	$85 \%$	$86 \%$
Governments	$42 \%$	$41 \%$	$38 \%$
Semi-governments	$8 \%$	$9 \%$	$10 \%$
Corporates	$27 \%$	$29 \%$	$32 \%$
Investment grade	$23 \%$	$25 \%$	$24 \%$
Non-Investment grade	$4 \%$	$4 \%$	$4 \%$
Covered Bonds ${ }^{1)}$	$4 \%$	$4 \%$	$4 \%$
ABS/MBS/CDO	$3 \%$	$3 \%$	$3 \%$
Equities	$3 \%$	$3 \%$	$3 \%$
Listed	$0 \%$	$0 \%$	$0 \%$
Private Equities	$3 \%$	$3 \%$	$3 \%$
Real Assets (without Infra-Debt)	$7 \%$	$7 \%$	$7 \%$
Others	$3 \%$	$3 \%$	$2 \%$
STI	$3 \%$	$2 \%$	$2 \%$
MV AuM in EUR bn.	57.4	60.6	66.4

Ordinary income split

Economic view based on market values without outstanding commitments for Private Equity and Alternative Real Estate as well as fixed-income investments of EUR 1,909.0 m. (EUR 1,161.6 m.) as at 31 December 2024 1) Of which Pfandbriefe and Covered Bonds $=56.4 \%$
2) Before real estate-specific costs. Economic view based on market values as at 31 December 2024

Currency allocation strategy to neutralise effects from SII liability profile

Duration-neutral strategy; modified duration changes rather result of yield curve deviations

Currency split of investments

• Modified duration of fixed-income mainly congruent with liability- and capital-driven targets
• GBP's higher modified duration predominantly due to life business

Modified duration

2024	2023	2022	2021	2020
4.4	4.5	4.9	5.8	5.8

Scenario analysis

Credit and Alternatives risks in focus

Portfolio	Scenario	Change in market value in m. EUR	Change in market value through PGL in m. EUR
Fixed-income securities	$+50 \mathrm{bps}$	$-1,314$	$-45$
	$+100 \mathrm{bps}$	$-2,563$	$-90$
Credit spreads	$+50 \%$	$-855$	$-69$
Equity (listed and private equity)	$-10 \%$	$-213$	$-213$

Capital adequacy ratio remains very strong Significant growth of $11 \%$ in Own Funds as well as $14 \%$ in SCR

Development of the Solvency II ratio

• Eligible Own Funds
• Solvency Capital Requirements (SCR)

1) Excluding minority shareholdings of EUR 636 m .
2) Hannover Re has implemented a minimum acceptable Solvency II ratio of $180 \%$ and a threshold of $200 \%$ All figures in m. EUR unless otherwise stated

Increase in eligible own funds driven by favourable new business development and investment income.

Increase in SCR mainly driven by business growth.

Very good capitalisation supports further business growth.

Efficient capital deployment supported by significant diversification Increase in own funds and capital requirements in line with business growth

Solvency Capital Requirements

in m. EUR

As at 31 December 2024 (2023)
Solvency capital requirements based on the internal model
Capital allocation based on Tail Value-at-Risk taking account of the dependencies between risk categories

Our capital structure consists not only of equity Unutilised Tier 2 provides additional flexibility

Reconciliation of IFRS Shareholders' equity vs. Solvency II own funds

in m. EUR

As at 31 December 2024

1) Foreseeable dividends and distributions incl. non-controlling interests
2) Net deferred tax assets

IR calendar

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.
(c) Hannover Rück SE. All rights reserved.

Hannover Re is the registered service mark of Hannover Rück SE.