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Corporate Outlook 2008

We remain very upbeat about the prospects for HLR going forward.

Growth opportunities over the next two years remain promising for international, well diversified reinsurers such as Hannover Life Re despite intensified competition, particularly in the Anglo-American markets,

We expect the healthy level of profitability to remain unchanged. We anticipate an EBIT margin in the range of 6.5% to 7.5% of net premium earned for the next two years.

Based on the double-digit premium growth in original currencies anticipated for coming years, the operating profits (EBIT) are expected to come in comfortably in excess of EUR 200 million; no allowance is made here for non-recurring special effects.

Our successful marketing and product concept of “five pillars”, which offers our clients a broad range of financing and risk orientated solutions remains in force and is continuously extended and refined:

  • traditional life and health business
  • financial solutions
  • development of new markets and products
  • bancassurance
  • preferred partnerships with large multinational clients

Markets

In the UK we expect to expand our business in the enhanced annuities segment. We see further potential in our cooperation with specialist insurers that assume entire portfolios of occupational retirement provisions to cost efficiently run off both current and future pension obligations. In the critical illness business we were one of the key players in the 2007 launch of new products. Here policy holders for the first time receive partial benefits in the event of a milder form of illness. We expect that this type of product will generate considerable interest in other countries too.

In the US we are looking forward to promising market opportunities in the areas of block assumption transactions and healthcare coverage for senior citizens. We started the year with the largest block assumption transaction in the history of Hannover Life Re: it is designed to realise the embedded value of individual life endowment and individual life unit-linked policies. We are continuing to focus on the implementation of risk decision systems at point of sale.

In the German market we continue our involvement in the area of senior citizens’ products and unit-linked covers, with long-term care annuities likely to enjoy a surge in demand. Here we expect our premium income to come in slightly higher.

In Asia we are increasing our regional focus: we plan to commence operational business at two new branches in Shanghai and Seoul. In India we intend to set up a Service company in Mumbai in order to benefit for the future potential of the country’s life market in the long term.