Hannover Rueck SE Q4 2022 Earnings Call Transcript

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

Question: Kamran M. Hossain - JPMorgan Chase & Co, Research Division - Analyst : Two questions from me. First one, I guess, on reserving. It's helpful to kind of understand the context of the decrease in the buffer of EUR 300 million to EUR 400 million. What I mentioned in, I guess, is going forward on that buffer, if you do manage to rebuild that within this year, should the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 09, 2023 / 1:00PM, HNRGn.DE - Q4 2022 Hannover Rueck SE Earnings Call absolute level of conservatism in the reserves increase naturally as, I guess, the new years unwind, you've reserved pretty cautiously? Should there be a natural uplift to the buffer just coming through over the next years on top of kind of what you're going to see this year? The second question is basically on Asia. So note that you had -- you commented or you talked about Asian growth a couple of years ago at the Investor Day. You hired a Board member recently. What are the plans there for growth? And any danger of kind of COVID-related type claims in 2023 in Asia?

Question: Teik L. Goh - RBC Capital Markets, Research Division - Analyst : Two questions, please. The first one is on Life & Health EBIT guidance. So starting from 2022, it looks as though the EBIT, excluding the COVID impact is just over EUR 1 billion, and the one-off in aggregate looks to be net neutral. So how do you square that against the 750, please, especially considering you spoke about a mid- to high double-digit uplift from the IFRS 17 transition? And the second question is on the solvency change between Q3 and Q4. So there's a 20-point movement, which looks like quite a strong development excluding the impact of the hybrid movement, because I understand the full dividend was only deducted in Q4 as well, please.

Question: Teik L. Goh - RBC Capital Markets, Research Division - Analyst : Yes. Got it. And you spoke about longevity releases in 2022 as well. Can you say how much did it amount to? And are you assuming any more within the EUR 750 million outlook?

Question: Teik L. Goh - RBC Capital Markets, Research Division - Analyst : Yes. Yes. Makes sense. And the solvency change, please?

Question: William Fraser Hardcastle - UBS Investment Bank, Research Division - Analyst : Just a quick one following up on reserves. It sounds like most of these additions have been really on the short-tail lines. Just really wanting to understand if there's been any extrapolation at all for higher, for longer impact on liability lines and also understanding the process in that. Is that a view of inflation, let's say, if it was higher for longer, would that be solely in your control to put that through? Or is there any sort of auditor regulator pressure informing those views? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 09, 2023 / 1:00PM, HNRGn.DE - Q4 2022 Hannover Rueck SE Earnings Call Second one is just really -- it's a very quick one. Just looking at the hurricane loss, you were very clear on the gross and net difference. But the net actually increased about EUR 50 million as well, I think, quarter-on-quarter. And generally, industry data points have been suggesting that would be lower, I'd have thought. So just trying to understand what the late surprise was there. Unidentified Company Representative Yes, I'll start with the second question. You're right, our net number has increased by roughly EUR 50 million. Our gross loss, which we are writing for own account, i.e., excluding the [fronting] we are doing on the ILS side has actually slightly reduced in the fourth quarter. So it may be counterintuitive by the net loss is then increasing. The reason here is that when we closed Q3, we looked at our aggregate of large loss protection, and we're applying that protection pro rata to the 9 month retention and limit that would have been available and both some of the loss against the aggregate of large loss protection, given that the fourth quarter was very benign, and we only have winter storm Elliot, in the fourth quarter, the protection actually had less losses for the full year than we were anticipating when we booked the net in position in Q3. That was the single biggest driver for the deterioration in our net number, it was not an increase in the gross figure, which we are writing for own [account].