HANNOVER, Germany, Feb. 3, 2006 (PRIMEZONE) -- Hannover, 3 February, 2006: Hannover Re has again used the capital market to obtain underwriting capacity for catastrophe risks. Labelled "K5," the transaction, which represents a capital substitute worth USD 370 million for Hannover Re, is the company's highest-volume risk securitisation to date. It was placed primarily with institutional investors in North America and is initially limited to a term of three years.
"With this transaction, we are providing against the anticipated contraction and price inflation on the retrocession markets and securing the underwriting capacity needed to share in the profitable market opportunities that will open up in the years ahead," Chief Executive Officer Wilhelm Zeller explained. Demand for property and marine reinsurance covers has risen dramatically in the aftermath of last year's severe natural disasters. The portfolio assembled for the "K5" securitisation consists of non-proportional treaties for property catastrophe, aviation and marine (including offshore) reinsurance.
Hannover Re is a leading provider of reinsurance covers in property catastrophe, aviation and offshore business. The new securitisation transaction will enable the company to write more business while conserving its capital resources. As part of its efficient capital management, Hannover Re has been using the securitisation of insurance risks as an equity substitute for some years now. These transactions enable the company to keep its cost of capital low and facilitate an increased return on equity. Investors enjoy extremely attractive returns if the loss experience of the covered portfolio is normal. Hannover Re completed the world's first risk securitisation in 1994. "K5" is the sixth such transaction. Together with Hannover Re's life and health reinsurance transactions this is the company's eleventh risk securitisation to date.
For further information please contact:
Press and Public Relations / Investor Relations: Eric Schuh (tel. +49 / 511 / 56 04-15 00, e-mail: eric.schuh@hannover-re.com)
Press and Public Relations:
Gabriele Handrick (tel. +49 / 511 / 56 04-15 02, e-mail: gabriele.handrick@hannover-re.com)
Investor Relations:
Gabriele Bodeker (tel. +49 / 511 / 56 04-17 36, e-mail: gabriele.boedeker@hannover-re.com
Hannover Re, with gross premiums of approximately EUR 10 billion, is one of the largest reinsurance groups in the world. It transacts all lines of property/casualty, life/health and financial/finite-risk reinsurance as well as specialty insurance. It maintains business relations with more than 5,000 insurance companies in about 150 countries. Its worldwide network consists of more than 100 subsidiaries, branch and representative offices in 18 countries. The rating agencies most relevant to the insurance industry have awarded Hannover Re very strong insurer financial strength ratings (Standard & Poor's AA- "Very Strong" and A.M. Best A "Excellent").
Disclaimer: Some of the statements in this press release may be forward-looking statements or statements of future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. Hannover Re does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such statements. Therefore, in no case whatsoever will Hannover Re and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages.
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