The underwriter reported a profit of Euro748.9 million off the back of an 11.2% increase in premium income for the year.
 

The operating profit (EBIT) improved to EUR 1.2 billion from the 2009 figure of EUR 1.1 billion.
 

Hannover Re said the year had been influenced by positive special effects in life and health reinsurance amounting to EUR 144.7 million. The Group’s net income included a charge of EUR 69.2 million from the sale of the company's US subsidiary Clarendon. 

The result also benefited by EUR 112.2 million on balance from a positive special effect associated with the decision of the Federal Fiscal Court regarding the taxation of foreign sourced income. 
 

“Yet even without this effect the result would have surpassed the original profit forecast for 2010,” it said.
 

“With net income after tax of EUR748.9 million we beat our record result of 2009,” said Chief Executive Officer Ulrich Wallin. “Although operational business was impacted by a heavy major loss incidence, the resulting strains were more than offset by lower basic losses and very healthy investment income as well as a positive special effect associated with a decision of the Federal Fiscal Court.”
 

In term s of the life performance Mr Wallin explained: “Even though the competitive pressure in non-life reinsurance intensified, we are still satisfied with the development of our operational business. Prices and conditions were for the most part preserved on a stable level thanks to the largely disciplined underwriting practice among reinsurers.”

In terms of the year’s catastrophes Hannover Re said the earthquakes had been the biggest issues for the underwriter.
 

The Chilean earthquake cost EUR 181.9 million. The earthquake in New Zealand gave rise to net loss expenditure of EUR 113.8 million, while the Haiti earthquake cost the reinsurer EUR 27.2 million.
 

Speaking prior to the events in Japan Hannover Re said it was optimistic about the prospects for the current financial year. 
 

“The treaty renewals as at 1 January 2011 in non-life reinsurance passed off better than expected. The company anticipates premium growth of up to 3% and a good profit contribution for the current financial year. In 2011 Hannover Re will again concentrate - in keeping with its strategy of active cycle management - on segments in which adequate premiums can be obtained or prices are rising. 
 

The more exacting requirements for risk capital at insurance companies (Solvency II), for whom the transfer of risk to reinsurers with good ratings offers an economically attractive alternative, are expected to open up potential growth opportunities.”