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Executive Summary of 2008 Business Results

Development of Premium Income

The gross premium income booked by Hannover Life Re totalled EUR 3.1 billion (EUR 3.1 billion) in the year under review; this corresponds to growth of 1.7% year-on-year. The strength of the euro against our three most important foreign currencies - namely the pound sterling, US dollar and Australian dollar - means that the real increase in the international portfolio is not fully reflected; at constant exchange rates growth would have stood at 7.9%. Net premium earned contracted by 0.4% to EUR 2.8 billion (EUR 2.8 billion) owing to a slight reduction in the level of retained premium.

The United Kingdom reaffirmed its position as the largest market in our portfolio through significant expansion in the area of impaired/enhanced annuities, despite the fact that we scaled back our involvement in risk-oriented covers in the face of the competitive situation.

Our preferred lines of life and annuity accounted for almost 85% of the total premium income booked by Hannover Life Re.

As far as morbidity risk is concerned, our principal areas of involvement are US senior health medicare supplement products, long-term care covers in Europe and Asia and disability policies in Australia. Individual accident business again accounted for a modest, but stable share of our premium volume at 2.2%.

Results

The operating profit (EBIT) generated for the life and health reinsurance business group amounted to EUR 120.7 million (EUR 229.8 million); allowance must be made for the negative special effect totalling EUR 72.1 million. Had it not been for this influencing factor, the operating profit would have reached EUR 192.8 million. The EBIT margin stood at 4.3%; it thus fell short of the previous year and our target range of 6.5% to 7.5% (excluding the negative special effect it would have reached 6.9%).

The total investment income generated for the life and health reinsurance business group amounted to EUR 245.5 million (EUR 293.9 million); this was equivalent to a decline of 16.4%.

With internal administrative expenses of EUR 70 million, corresponding to an expense ratio of 2.2% relative to gross written premium, we were again the cost leader among highly reputed international life and health reinsurers.

The consolidated net income of the life and health reinsurance business group came in at EUR 78.3 million (EUR 187.7 million), with a tax ratio of 29.4% and after allowance for minority interests,. This was equivalent to earnings of EUR 0.65 (EUR 1.57) per share.