Hannover Rueck SE Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kamran Hossain - JPMorgan - Analyst : Hi, morning. Two questions and just a quick comment as well. I think the first question I was interested in is just on capital deployment. I guess you've signalled in the Solvency 2 ratio for next year that you will deploy some capital into growth. Just interested in like P&C, where you kind of think this growth comes from. Is this taking shares? Is this new business? Is this different regions? Kind of just some top-down topics there. The second question is just on kind of thinking about the combined ratio Clearly, you know, an improvement next year is helpful. Just interested in where that's running at present. I guess you were kind of 80, just under 88%. You've taken some, you know, you've handed to reserves, et cetera. Where do you think that's kind of running right now? And then just to finish up, I think just, I'm sure there'll be lots of opportunities to say this, but Jean-Jacques, I guess, you know, from the team at JEP, you know, just wanted to say we're assessing missile interactions. You came into the job inheriting a really well-run business and I think it's safe to say it's being left in that way too. So I just want to say thanks from our side. You're passing on an excellent business to Clemens and the team and we're looking forward to saying goodbye. So that was my comment and the two questions before, but thanks very much from our side.

Question: Kamran Hossain - JPMorgan - Analyst : Fantastic, thanks Clemens.

Question: James Shuck - CITI - Analyst : Thank you and good morning. My first question is on the growth outlook. So I think in your comments at the beginning you mentioned there's around five points of SCR increase which is expected from the growth on the books coming through the solvency at nine months. I think most of that was coming from the lower retro. I'm just struggling to square that a bit with the TNC Re gross revenue guidance that you're giving for above 7% because if most of that FCR increase is coming from the low retro then I might have expected a little bit more. Second question is on just the expectations around the margin build. I think you've indicated that you'll continue to offset the difference between the discount rate benefit and the IFE. I'm just wondering where you are in terms of the the actual reserve buffer itself. Are you planning on adding to that over the planned period or in Q4 and into next year, either in absolute terms or as a percentage of the reserves themselves? And then finally, again, Jean-Jacques, thanks very much for your time. It seems brief but very fast. I'm just keen to hear as you reflect back on the legacy that you're leaving I'm just keen to hear your thoughts on what you contributed over that time.

Question: Michael Huttner - Berenberg - Analyst : Fantastic. Thank you so much. Two questions. The first one is on 7% growth. I wonder if you can split it out a little bit, because I'm still a little bit vague on what you said about cyber at your kind of deep dive session a few weeks ago. It's me. It's not what you said. It's just I can't remember whether you're back in growth or you're pausing. I'm a bit confused. And for memory, cyber is a significant component potentially. So the pockets of growth. And the second is also on growth. So you've got this Target this year and next year of live CSM growth of 2%. You've achieved 6.6%, and I can't see in any of the numbers, I don't know the company very well, but I can't see in any of the numbers anything to cause concern going forwards. I'm just wondering whether you could comment on whether 2% is just because you like being very conservative, or is there something we're missing, or is 6% the right number, which is nine months? I don't know. Thank you.

Question: Michael Huttner - Berenberg - Analyst : If I may ask, on the CSM you mentioned the prudent reserving. In the slide 10, you've got this lovely waterfall chart. Where is the reserve, what I would call reserve release? Which of these bits of the waterfall is it in? Is it in the change in estimates?

Question: Vinit Malhotra - Mediobanca - Analyst : Yes, good morning. I hope you can hear me. First of all, congratulations, Jean-Jacques, on your next endeavours. And, of course, congratulations to Clemens. So just on my question, so there are three questions, please. Two quickly, numbers, and one just maybe theoretical on the outlook. So just on the outlook, you know, in the press release there is a comment that the combined ratio outlook is based on the improved market environment. And then obviously, you know, we know that you're talking about a flat pricing. And then when we look at the CAC, or the Large Loss Budget, that's about, you know, maybe one and a half, two points, you know, negative drag, let's say, next year, but still the combined ratio is, you're keeping it flat or flattish on the nine-month level. So just curious a little bit about how you see this cat or large loss loading being absorbed in the combined ratio guidance, and I know it's coming from retro, but also how is it reflected in that sort of table? So it does indicate that the pricing of the business would be getting a little better in your view there. So the first thing -- second thing is the third quarter stand alone. I know you don't look at it purely on that, but the reserving the, the run off seems to be a bit negative here, 18 million or, I mean, I'm sorry if I missed it, is it from any particular direction that you can guide us on and so on. And lastly the real estate, the 44 million Rival. I know we've been talking about private equity real estate and we always said it's not been happening, but is there any commentary on why now? Is it just because the funds gave you the updated valuations or is it any drivers there that you can point us to? Thank you very much.

Question: Shanti King - BofA Global Research - Analyst : I just had a couple of questions on life and health. I noticed that the reinsurance service result has come in a little bit softer than we'd expected. I was just wondering if you could help me understand the biggest contributor to that, and if you expect the trend to continue towards year-end? And then the second question is just on the assumption changes you mentioned on the LNH book that you've taken. And can you talk us through what you're sort of seeing to drive those changes in your view? I think you mentioned something around the UK. But yeah, that was it. Thank you.

Question: Shanti King - BofA Global Research - Analyst : Yeah, it was just on the reinsurance service result. It just came in a bit softer than consensus, and we were just wondering what the biggest contributor to that was, and if you expect that to continue into the year-end. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 11, 2024 / 9:30AM, HNRGn.DE - Q3 2024 Hannover Rueck SE Earnings Call

Question: Shanti King - BofA Global Research - Analyst : Okay, thank you. And then sorry, I just had one more question on the China critical illness, but I know you loaded reserves this quarter. Are you expecting more strengthening for?

Question: Shanti King - BofA Global Research - Analyst : Okay, cool. Thank you.

Question: Faizan Lakhani - HSBC - Analyst : Hi there. Reiterating what everyone else said, Jean-Jacques, thank you very much for our interactions and best of luck for the future. And I also wanted to congratulate Clemens as well. My first question is coming back to a topic that's been addressed a number of times, and that's the 2025 outlook on the PNC combined ratio. Just putting all the bits together, you're around that mark right now at the nine-month stage. You have a bit REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 11, 2024 / 9:30AM, HNRGn.DE - Q3 2024 Hannover Rueck SE Earnings Call of a drag from discounting but at the same time you have the benefit from less retro, which should be a positive. How do I sort of split those elements out? And just, I guess, broad picture, how dependent are you on 1-1 prices being flattened next year to maintain your outlook for the combined ratio? The second question was on the large loss budget. Could you split out what's driving that? How much of that's down to gross growth versus the reduction in retro? and just wanted to sort of get a qualitative feel in terms of what happens to the volatility in a normalized year for NatCaps. Thank you.

Question: Faizan Lakhani - HSBC - Analyst : Sorry, just coming back to the first one. How should we assume volatility in the NATCAT losses to change, given the reduction in retro? Will it be relatively modest, or will there be certain perils that could be more volatile?

Question: Faizan Lakhani - HSBC - Analyst : Thank you very much. Much appreciated. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 11, 2024 / 9:30AM, HNRGn.DE - Q3 2024 Hannover Rueck SE Earnings Call

Question: Henry Heathfield - Morningstar, Inc. - Analyst : Good morning, Noel. Thank you for taking my call and congratulations to you both on your future Moving on, just a quick question coming off the back of that question there. Your large loss budget has increased by 50% to $2.1 billion in over 2022. With all the kind of news we're seeing around climate change and natural catastrophes, are you generally growing this line faster? Than the rest of the P&C you book. And then should we expect the start of the softer cycle starting next year? That's kind of my two questions. Thank you.

Question: Henry Heathfield - Morningstar, Inc. - Analyst : Are you ignoring any particular lines?

Question: Henry Heathfield - Morningstar, Inc. - Analyst : Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 11, 2024 / 9:30AM, HNRGn.DE - Q3 2024 Hannover Rueck SE Earnings Call