Hannover Re's net income for 2014 was €985.6m ($1.1bn), a 10.1% increase on the €895.5m it made in 2013. The company described the figures as the best financial year in its history.
Success in 2014 was attributed to a 25% rise in net income in life and health reinsurance and a continued good underwriting result in property and casualty reinsurance.
Investment income also contributed to the profit, with a return on investment for assets under its own management of 3.3%, a slight increase on Hannover Re's target of 3.2%. Ordinary investment income excluding income from funds withheld and contract deposits improved by 2.6% from €1bn to €1.1bn despite persistently low interest rates.
Hannover Re's assets under management grew from €31.9bn in 2013 to €36.2bn, owing to a combination of a continued positive operating cash flow, the substantial rise in hidden reserves – especially for fixed-income securities – and also exchange rate effects.
Looking at 2015 Hannover Re said that the general climate was likely to remain 'challenging', with little change in the intense competitive pressure in property and casualty reinsurance, or in the low level of interest rates. The company added that it expects its asset portfolios to continue to grow, with a return on investment target of 3%.
"Our good market position as a broadly diversified reinsurer, our excellent financial strength and our low administrative expense ratio relative to our competitors should nevertheless enable us to achieve another good result in 2015," said CEO Ulrich Wallin.