Obligation Hannover Rückversicherung SE 1.75% ( XS2198574209 ) en EUR

Hannover Rückversicherung SE

86.1 % ▲

Allemagne

XS2198574209 ( en EUR )

1.75% par an ( paiement annuel )

07/10/2040

Prospectus brochure de l'obligation Hannover Rückversicherung SE XS2198574209 en EUR 1.75%, échéance 07/10/2040

100 000 EUR

500 000 000 EUR

08/10/2024 ( Dans 146 jours )

L'Obligation émise par Hannover Rückversicherung SE ( Allemagne ) , en EUR, avec le code ISIN XS2198574209, paye un coupon de 1.75% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 07/10/2040

Prospectus dated 2 July 2020

Hannover Rück SE
(a European Company (Societas Europaea SE) incorporated in Hannover,
Federal Republic of Germany)
500,000,000 Subordinated Fixed to Floating Rate Bonds with
scheduled maturity in 2040
ISIN XS2198574209, Common Code 219857420, WKN A289T5
Issue price: 99.271 per cent
Hannover Rück SE (the "Issuer") will issue on or about 8 July 2020 (the "Issue Date") 500,000,000 Subordinated
Fixed to Floating Rate Bonds with scheduled maturity in 2040 (the "Bonds") in the denomination of 100,000 each.
The Bonds will be governed by the laws of the Federal Republic of Germany ("Germany").
The Bonds will bear interest from and including the Issue Date to but excluding 8 October 2030 (the "First Reset Date")
at a rate of 1.75 per cent per annum, scheduled to be paid annually in arrear on 8 October in each year, commencing on
8 October 2020 (short first coupon). Thereafter, unless previously redeemed, the Bonds will bear interest at a rate of
3.00 per cent per annum above 3-month EURIBOR, being the Euro-zone inter-bank offered rate for three-month Euro
deposits, scheduled to be paid quarterly in arrear on 8 January, 8 April, 8 July and 8 October in each year (each a
"Floating Interest Payment Date"), commencing on 8 January 2031.
Under certain circumstances described in § 4 of the Terms and Conditions of the Bonds (the "Terms and Conditions"),
interest payments on the Bonds may be deferred at the option of the Issuer or will be required to be deferred.
The Bonds are scheduled to be redeemed at the Redemption Amount (as defined in the Terms and Conditions) on the
Floating Interest Payment Date falling on or around 8 October 2040 (the "Scheduled Maturity Date"), provided that
the Conditions to Redemption and Repurchase (as defined in the Terms and Conditions) are fulfilled. If this is not the
case, the Bonds will only be redeemed on the first Floating Interest Payment Date following the Scheduled Maturity
Date on which the Conditions to Redemption and Repurchase are fulfilled.
Under certain circumstances described in § 5 of the Terms and Conditions, the Bonds may be subject to early redemption,
always subject to the Conditions to Redemption and Repurchase being fulfilled.
The Bonds will initially be represented by a temporary global bond in bearer form (the "Temporary Global Bond").
Interests in the Temporary Global Bond will be exchangeable, in whole or in part, for interests in a permanent global
bond (the "Permanent Global Bond" and together with the Temporary Global Bond, the "Global Bonds") not earlier
than 40 days after the Issue Date (the "Exchange Date"), upon certification as to non-U.S. beneficial ownership. The
Global Bonds will be deposited with a common safekeeper for Clearstream Banking S.A. and Euroclear Bank SA/NV
(together, the "Clearing System").
This prospectus (the "Prospectus") constitutes a prospectus within the meaning of Article 6.3 of Regulation (EU) No
2017/1129 of the European Parliament and of the Council of 14 June 2017 (as amended, the "Prospectus Regulation").
This Prospectus will be published in electronic form together with all documents incorporated by reference on the
website of the Luxembourg Stock Exchange (www.bourse.lu) and on the website of the Issuer (www.hannover-
re.com/debt-issues).

This Prospectus has been approved by the Commission de Surveillance du Secteur Financier, Luxembourg ("CSSF") in
its capacity as competent authority under the Prospectus Regulation. The CSSF only approves this Prospectus as meeting
the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval
should neither be considered as an endorsement of the Issuer that is subject of this Prospectus nor of the quality of the
securities that are the subject of this Prospectus. Investors should make their own assessment as to the suitability of
investing in the Bonds.
This Prospectus will be valid until 2 July 2021 and may in this period be used for admission of the Bonds to trading on
a regulated market. In case of a significant new factor, material mistake or material inaccuracy relating to the information
included in this Prospectus which may affect the assessment of the Bonds, the Issuer will prepare and publish a
supplement to this Prospectus without undue delay in accordance with Article 23 of the Prospectus Regulation. The
obligation of the Issuer to supplement this Prospectus will cease to apply once the Bonds have been admitted to trading
on the regulated market of the Luxembourg Stock Exchange and at the latest upon expiry of the validity period of this
Prospectus.
Application has been made to the Luxembourg Stock Exchange for the Bonds to be listed on the official list of the
Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's
regulated market. The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of Directive
2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (as
amended, "MiFID II").
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, the Bonds in any jurisdiction
where such offer or solicitation is unlawful.
The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act") and subject to certain exceptions, the Bonds may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons.
The Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the European Economic Area ("EEA") or the United Kingdom. For these
purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article
4(1) of MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "Insurance
Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of
Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No 1286/2014 (as
amended, the "PRIIPs Regulation") for offering or selling the Bonds or otherwise making them available to retail
investors in the EEA or the United Kingdom has been prepared and therefore offering or selling the Bonds or otherwise
making them available to any retail investor in the EEA or the United Kingdom may be unlawful under the PRIIPs
Regulation.
Following the First Reset Date, interest amounts payable under the Bonds are calculated by reference to 3-month
EURIBOR ("EURIBOR"), which is provided by the European Money Market Institute ("EMMI"). As at the date of this
Prospectus, EMMI appears on the register of administrators and benchmarks established and maintained by the European
Securities and Markets Authority ("ESMA") pursuant to Article 36 of the Benchmark Regulation (Regulation (EU)
2016/1011) (the "Benchmark Regulation").
Prospective purchasers of the Bonds should ensure that they understand the nature of the Bonds and the extent of their
exposure to risks and that they consider the suitability of the Bonds as an investment in the light of their own
circumstances and financial condition. Investing in the Bonds involves certain risks. Please review the section entitled
"Risk Factors" beginning on page 6 of this Prospectus.
Joint Lead Managers
Deutsche Bank
J.P. Morgan
Société Générale
UniCredit Bank
Corporate & Investment Banking

RESPONSIBILITY STATEMENT
The Issuer with its registered office in Germany accepts responsibility for the information contained in this Prospectus
and hereby declares that the information contained in this Prospectus is, to the best of its knowledge, in accordance with
the facts and contains no omission likely to affect its import.
The Issuer further confirms that (i) this Prospectus contains all relevant information with respect to the Issuer (also
referred to as "Hannover Re" herein) and its consolidated subsidiaries taken as a whole (the "Hannover Re Group" or
the "Group") and to the Bonds which is material in the context of the issue and the offering of the Bonds, including all
relevant information which, according to the particular nature of the Issuer and of the Bonds is necessary to enable
investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position,
profits and losses, and prospects of the Issuer and the Hannover Re Group and of the rights attached to the Bonds; (ii) the
statements contained in this Prospectus relating to the Issuer, the Hannover Re Group and the Bonds are in every material
respect true and accurate and not misleading; (iii) there are no other facts in relation to the Issuer, the Hannover Re Group
or the Bonds the omission of which would, in the context of the issue and offering of the Bonds, make any statement in
this Prospectus misleading in any material respect; and (iv) reasonable enquiries have been made by the Issuer to ascertain
such facts and to verify the accuracy of all such information and statements.
NOTICE
No person is authorised to give any information or to make any representation other than those contained in this Prospectus
and, if given or made, such information or representation must not be relied upon as having been authorised by or on
behalf of the Issuer or Deutsche Bank Aktiengesellschaft, J.P. Morgan Securities plc, Société Générale or UniCredit Bank
AG (together, the "Joint Lead Managers").
This Prospectus should be read and understood in conjunction with any supplement hereto and with all documents
incorporated herein or therein by reference.
The legally binding language of this Prospectus is English. Any part of this Prospectus in German language constitutes a
translation, except for the Terms and Conditions in respect of which German is the legally binding language.
In this Prospectus, all references to "", "EUR" or "Euro" are to the currency introduced at the start of the third stage of
the European economic and monetary union, and as defined in Article 2 of Council Regulation (EC) No. 974/98 of 3 May
1998 on the introduction of the Euro, as amended. References to "billions" are to thousands of millions.
Each investor contemplating purchasing any Bonds should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. This Prospectus does not constitute an
offer of Bonds or an invitation by or on behalf of the Issuer or the Joint Lead Managers to purchase any Bonds. Neither
this Prospectus nor any other information supplied in connection with the Bonds should be considered as a
recommendation by the Issuer or the Joint Lead Managers to a recipient hereof and thereof that such recipient should
purchase any Bonds.
This Prospectus reflects the status as at its date. The offering, sale and delivery of the Bonds and the distribution of this
Prospectus may not be taken as an implication that the information contained herein is accurate and complete subsequent
to the date hereof or that there has been no adverse change in the financial condition of the Issuer since the date hereof.
To the extent permitted by the laws of any relevant jurisdiction, none of the Manager, any of its affiliates or any other
person mentioned in this Prospectus, except for the Issuer, accepts responsibility for the accuracy and completeness of
the information contained in this Prospectus or any other documents incorporated by reference and accordingly, and to
the extent permitted by the laws of any relevant jurisdiction, none of these persons accept any responsibility for the
accuracy and completeness of the information contained in any of these documents. The Joint Lead Managers have not
independently verified any such information and accept no responsibility for the accuracy thereof.
2

This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer
or solicitation.
The distribution of this Prospectus and the offering, sale and delivery of the Bonds in certain jurisdictions may be restricted
by law. Persons into whose possession this Prospectus comes are required to inform themselves about and to observe any
such restrictions. For a description of the restrictions see the section "Subscription and Sale of the Bonds Selling
Restrictions" below. In particular, the Bonds have not been and will not be registered under the Securities Act and are
subject to United States tax law requirements. Subject to certain exceptions, the Bonds may not be offered, sold or
delivered within the United States of America or to U.S. persons as defined in Regulation S under the Securities Act
("Regulation S").
The Bonds issued pursuant to this Prospectus are complex financial instruments and are not a suitable or appropriate
investment for all investors. In some jurisdictions, regulatory authorities have adopted or published laws, regulations or
guidance with respect to the offer or sale of securities such as the Bonds to retail investors.
For the avoidance of doubt the content of any website referred to in this Prospectus does not form part of this Prospectus
and the information on such websites has not been scrutinized or approved by the CSSF as competent authority under the
Prospectus Regulation.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET: PROFESSIONAL INVESTORS AND ECPS
ONLY
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the
Bonds has led to the conclusion that: (i) the target market for the Bonds is eligible counterparties and professional clients
only, each as defined in MiFID II; and (ii) all channels for distribution of the Bonds to eligible counterparties and
professional clients are appropriate. Any person subsequently offering, selling or recommending the Bonds (a
"distributor") should take into consideration the manufacturers' target market assessment; however, a distributor subject
to MiFID II is responsible for undertaking its own target market assessment in respect of the Bonds (by either adopting
or refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PRIIPS REGULATION / PROSPECTUS REGULATION / PROHIBITION OF SALES TO EEA AND UK
RETAIL INVESTORS
The Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the EEA or the United Kingdom. For these purposes, a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer
within the meaning of the Insurance Distribution Directive, where that customer would not qualify as a professional client
as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by the PRIIPs
Regulation for offering or selling the Bonds or otherwise making them available to retail investors in the EEA or the
United Kingdom has been prepared and therefore offering or selling the Bonds or otherwise making them available to
any retail investor in the EEA or the United Kingdom may be unlawful under the PRIIPs Regulation.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or accepting an offer to
purchase, any Bonds (or any beneficial interests therein) from the Issuer and/or the Joint Lead Managers the foregoing
representations, warranties, agreements and undertakings will be given by and be binding upon both the agent and its
underlying client.
BENCHMARK REGULATION: STATEMENT ON REGISTRATION OF BENCHMARK ADMINISTRATOR
Following the First Reset Date, interest amounts payable under the Bonds are calculated by reference to the EURIBOR,
which is provided by the EMMI. As at the date of this Prospectus, EMMI appears on the register of administrators and
benchmarks established and maintained by ESMA pursuant to Article 36 of the Benchmark Regulation.
3

SINGAPORE SECURITIES AND FUTURES ACT PRODUCT CLASSIFICATION
In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the "SFA") and the
Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the "CMP Regulations 2018"), the
Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Bonds
are 'prescribed capital markets products' (as defined in the CMP Regulations 2018) and Excluded Investment Products
(as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice
on Recommendations on Investment Products).
STABILISATION
IN CONNECTION WITH THE ISSUE OF THE BONDS, DEUTSCHE BANK AKTIENGESELLSCHAFT (THE
"STABILISING MANAGER") (OR ANY PERSON ACTING ON BEHALF OF ANY STABILISING MANAGER)
MAY OVER-ALLOT BONDS OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET
PRICE OF THE BONDS AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER,
STABILISATION MAY NOT NECESSARILY OCCUR. ANY STABILISATION ACTION MAY BEGIN ON OR
AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE
BONDS IS MADE AND, IF BEGUN, MAY CEASE AT ANY TIME, BUT IT MUST END NO LATER THAN THE
EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE BONDS AND 60 DAYS AFTER THE DATE OF THE
ALLOTMENT OF THE BONDS. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE
CONDUCTED BY THE STABILISING MANAGER (OR ANY PERSON ACTING ON BEHALF OF THE
STABILISING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements, including statements using the words "believes",
"anticipates", "intends", "expects" or other similar terms. This applies in particular to statements under the caption
"Description of the Issuer and the Hannover Re Group" and statements elsewhere in this Prospectus relating to, among
other things, the future financial performance, plans and expectations regarding developments in the business of the Issuer
and Hannover Re Group. These forward-looking statements are subject to a number of risks, uncertainties, assumptions
and other factors that may cause the actual results, including the financial position and profitability of the Issuer or
Hannover Re Group, to be materially different from or worse than those expressed or implied by these forward-looking
statements. Neither the Issuer nor the Manager do assume any obligation to update such forward-looking statements and
to adapt them to future events or developments.
ALTERNATIVE PERFORMANCE MEASURES
Certain terms used in this Prospectus and financial measures presented in the documents incorporated by reference are
not recognised financial measures under International Financial Reporting Standards as adopted by the European Union
("IFRS") ("Alternative Performance Measures") and may therefore not be considered as an alternative to the financial
measures defined in the accounting standards in accordance with generally accepted accounting principles. The Issuer has
provided these Alternative Performance Measures because it believes they provide investors with additional information
to assess the operating performance and financial standing of Hannover Re Group's business activities. The definition of
the Alternative Performance Measures may vary from the definition of identically named alternative performance
measures used by other companies. The Alternative Performance Measures for Hannover Re Group presented by the
Issuer should not be considered as an alternative to measures of operating performance or financial standing derived in
accordance with IFRS. These Alternative Performance Measures have limitations as analytical tools and should not be
considered in isolation or as substitutes for the analysis of the consolidated results or liabilities as reported under IFRS.
For further information, please see "Description of the Issuer and the Hannover Re Group - Alternative Performance
Measures".

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TABLE OF CONTENTS
RISK FACTORS................................................................................................................................................................. 6
TERMS AND CONDITIONS OF THE BONDS ............................................................................................................. 23
USE OF PROCEEDS ....................................................................................................................................................... 76
DESCRIPTION OF THE ISSUER AND THE HANNOVER RE GROUP ..................................................................... 77
TAXATION ...................................................................................................................................................................... 89
SUBSCRIPTION AND SALE OF THE BONDS ............................................................................................................ 93
GENERAL INFORMATION ........................................................................................................................................... 96
DOCUMENTS INCORPORATED BY REFERENCE .................................................................................................... 98

5

RISK FACTORS
Before deciding to purchase the Bonds, investors should carefully review and consider the following risk factors and the
other information contained in this Prospectus. Should one or more of the risks described below materialise, this may
have a material adverse effect on the business, prospects, shareholders' equity, assets, financial position and results of
operations (Vermögens-, Finanz- und Ertragslage) or general affairs of the Issuer or the Group. Moreover, if any of these
risks occur, the market value of the Bonds and the likelihood that the Issuer will be in a position to fulfil its payment
obligations under the Bonds may decrease, in which case the holders of the Bonds could lose all or part of their
investments. Factors which the Issuer believes may be material for the purpose of assessing the market risks associated
with the Bonds are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the Bonds, but
the Issuer may be unable to pay interest, principal or other amounts on or in connection with the Bonds for other unknown
reasons than those described below. Additional risks of which the Issuer is not presently aware could also affect the
business operations of Hannover Re Group and have a material adverse effect on Hannover Re's business activities and
financial condition and results of operations. Prospective investors should read the detailed information set out elsewhere
in this Prospectus (including any documents incorporated by reference herein) and reach their own views prior to making
any investment decision.
Words and expressions defined in the Terms and Conditions shall have the same meanings in this section.
The following risk factors are organized in categories depending on their respective nature. In each category the most
material risk factors, based on the probability of their occurrence and the expected magnitude of their negative impact,
are mentioned first.
Potential investors should, among other things, consider the following:
Risks relating to the Issuer and the Hannover Re Group
Underwriting Risks and Other Business-Related Risks
Natural catastrophe risk
Natural catastrophes are partially covered by insurance policies in the property and casualty and life and health
(re)insurance written by the Hannover Re Group. Such catastrophic events include, among other things, windstorms and
hailstorms, floods, earthquakes, major fires, cold spells or pandemics. Neither catastrophes as such nor the scale of loss
and damage caused by such events can be predicted. Even though the Hannover Re Group monitors the aggregate risk
tolerance with respect to catastrophic events in each geographical region, catastrophe-related damage and claims can lead
to extraordinarily high losses outside this tolerance. Furthermore, the scale of catastrophe losses may increase in the
coming years relative to the multi-year average.
A certain proportion of the required risk capital is attributable to risks from natural disasters. For the purpose of assessing
Hannover Re Group's material catastrophe risks from natural hazards (especially earthquake, windstorm and flood)
Hannover Re Group uses licensed stochastic catastrophe simulation models including latest results from scientific
research and enriched with the expertise of own geoscientists from specialist departments. The model's outcome are
probability distributions representing the full range of possible loss scenarios from every natural catastrophe worldwide.
For the purposes of portfolio optimization and steering the geographical diversification maximum underwriting limits and
thresholds are introduced for various extreme loss scenarios and return periods in light of profitability criteria. The
monitoring of the risks resulting from natural hazards is rounded out by scenario analyses.
Meteorological extreme events like intense tropical cyclones, windstorms, floods are often seasonal with the highest
proportion of annual losses occurring on average in the third quarter, with quarter to quarter comparisons varying very
strongly. The ultimate impact of a catastrophic event or multiple catastrophic events on Hannover Re Group's financial
condition, results of operations, business and prospects is difficult to predict and will be affected by a number of factors,
6

including, inter alia, the frequency of loss events, the severity of each event, the total amount of insured exposure in the
area affected by each event and changes in the value of the insured property. To the extent the Hannover Re Group writes
more natural catastrophe covers in the future, a greater impact in absolute terms of natural catastrophe losses on Hannover
Re Group's results can be expected.
The possible effects of natural catastrophes are compounded by the correlation between climate change and severe storms,
floods and drought as well as adverse agricultural yields. The effects of global warming and climate change cannot be
predicted and are likely to aggravate potential loss scenarios, risk modelling and financial performance. Furthermore,
climate change could lead to extreme weather events spreading to parts of the world that have not previously experienced
extreme weather conditions.
Natural risks of large scale may also occur as pandemic events. In the property & casualty segment this would be relevant
for the coverage of event cancellations, business interruption or credit and surety reinsurance.
In case of adverse natural catastrophe events covered under current and future contracts, a negative impact on Hannover
Re Group's net income, business and prospects is possible.
Reserving risk Property and Casualty
Hannover Re Group companies systematically cover property and casualty risks underwritten by primary insurers and
reinsurers and calculates the amount of technical provisions that are to be established for insured events in accordance
with relevant actuarial methods that reflect assumptions and empirical values.
Due to their nature and possible delays in reporting man-made casualty losses, an adverse effect of a man-made casualty
loss may not be recognized until some period after the occurrence of the loss. While the level of provisions constituted is
regularly adjusted in the context of normal run-off with the aid of the latest information available to management. The
adequacy of the provisions initially constituted and subsequently adjusted as necessary cannot be assured. These actuarial
calculations are based on past experience with similar policies, forecasts regarding the future, and actuarial models. Over
time, these assumptions could prove to be inaccurate, for example due to influence of inflation factors within claim
amounts or costs and might therefore necessitate additional expenditures. Besides this, the interest rate development may
be forecasted wrong. Despite efforts to minimise such risk, deviations can occur if data is interpreted incorrectly or
external factors outside the influence of the Hannover Re Group change.
A price determination which appropriately reflects the previously mentioned risk in the property and casualty reinsurance
is complicated due to the increasing complexity and long-term nature of the run-off. In the insurance and reinsurance
market this was demonstrated in the past, for example, by claims connected with asbestos and claims from the attack on
the World Trade Center. On basis of the actual future development especially with respect to risks that have currently
not even been recognized as such or as a consequence of the inaccurate selection or application of methods to calculate
the constituted provisions, the Hannover Re Group might be compelled to increase the provisions to an unpredictable
extent.
Should it be necessary to increase provisions or liabilities this could negatively affect the net income respectively cash
flows and subsequently the capital adequacy of the Hannover Re Group.
Man-made catastrophe risk
Man-made disasters are partially covered by insurance policies in the property and casualty and life and health
(re)insurance written by the Hannover Re Group. Complex technology intersecting with increased population density,
infrastructure and higher rates of utilization of natural resources increase the likelihood and the magnitude of catastrophic
man-made events. Man-made disasters involving chemical, biological or nuclear hazards in particular bear high potential
for losses covered by companies within the Hannover Re Group.
Geopolitical risks have increased worldwide since the terror attacks on the United States on 11 September 2001, especially
the risks of terrorist attacks and potential military responses to them, as well as risks created by political tensions between
countries. The Hannover Re Group, as many other reinsurance companies, tries to exclude terror risks from their insurance
7

terms, or considerably increased the premiums for the insurance of these risks. However, the potential of terror risks
materializing could not be completely eliminated by these measures. While, on the one hand, an exclusion of liability is
not possible with respect to all insurance contracts, consequential damage caused by terror attacks such as fire may, on
the other hand, still give rise to claims brought against companies of the Hannover Re Group by policyholders. Another
risk is that potential future terror attacks might not be clearly identifiable as such or that there is at least no proof of a
terror attack having occurred. If, in these cases, the limits or exclusions provided for in the insurance contracts cannot be
enforced, this would result in increased claim expenditure. Hannover Re Group cannot definitely assess the consequences
that future terror attacks may have on its business activities. Increased political risks and risks resulting from potential
future terrorist attacks may have an adverse effect on the Hannover Re Group's net income.
In recent years, Hannover Re had offered insurers protection against cyber risk. Cyber-attacks on critical systems are
becoming increasingly common. They can cause considerable financial losses and also damage corporate reputations.
Moreover, they can severely hamper private and public life, especially if critical infrastructures are impacted such as
the health, transportation, traffic and energy sectors. In such instances supply bottlenecks with lasting effects as well as
major disruptions to public safety may ensue. In a networked world the repercussions of cyber-attacks are intensifying
because the volume of data stored around the world is constantly growing and in this context it is not only one's own
technical infrastructure that needs to be secured. On the contrary, the trend towards cloud computing is increasingly
shifting the focus to third-party infrastructures and the associated network connection. Growth in connectivity between
digital and physical worlds as well as the progress in commercial deployment of "internet of things" and "artificial
intelligence" will further increase risk aggregation effects. Therefore, cyber events covered by the Hannover Re Group
may have a negative influence on its net income.
Premium risk
The business conducted by the Hannover Re Group is founded on the deliberate assumption of risks through the
conclusion of insurance and reinsurance contracts.
In deciding on whether reinsurance or retrocession agreements are to be entered, the Hannover Re Group relies on the
provision of correct and sufficient risk information by the respective ceding company. Should the Hannover Re Group,
on the basis of incorrect or incomplete information, wrongfully assess the covered risks, this may result in additional
expenses. Even if the Hannover Re Group would have recourse against the ceding company it cannot be assured that these
claims are adequate and enforceable. Inaccurate or inadequate information could result in the underwriting of unprofitable
or loss-making reinsurance or retrocession contracts.
Furthermore, the Hannover Re Group makes use of risk quantification models based on simplified assumptions that cannot
fully reflect actual circumstances. In addition to this, cedants may write business, the quality of which is incorrectly
assessed by the Hannover Re Group as more favourable than it actually is.
Property and casualty reinsurance is a cyclical business. The same is true to a lesser extent of life reinsurance. The cycles
in the reinsurance business are periods characterised by intense price competition and less restrictive underwriting
standards followed by periods of higher premium rates and more selective underwriting standards. This means that the
business volume of the Hannover Re Group does not develop in a linear manner, hence the volume of reinsurance business
is subject to considerable fluctuations, which can be attributed to a broad range of factors. On the one hand, competition
has increased in recent years in the reinsurance markets, especially as a result of market entry by new competitors, a
general high availability of capital and thus capacities and as a result of large customers attempting to bear standard risks
themselves or cover them through their own captive insurance companies. A continuation of this trend could reduce the
volume of reinsurance and premiums in this segment. Other factors, which cannot always be foreseen and/or influenced,
include inter alia the frequency and scale of catastrophic events, the availability of reinsurance capacities, the volatility
of capital markets, the occurrence of new risks (for example as a result of new technologies) and general economic
conditions. Furthermore, these factors can also bring about changes in treaty conditions and hence profit margins or lead
to a slowdown or decline in the business development adversely affecting the financial position or net income of the
Hannover Re Group.
8

Longevity and mortality risk
Life reinsurance business predominantly includes mortality risk which provides a lump sum payment upon death of the
life insured, and longevity risk which typically provides a regular income for life. Mortality risk is the core business of
the Life & Health reinsurance business.
In the last years, Hannover Re Group considerably extended covers for longevity business in the United Kingdom and in
the process of expanding this offering into other markets. The ageing population in some countries has led to an increasing
latent demand for annuity and pension provision. Longevity risk affects contracts where benefits are based upon the
likelihood of survival, e.g. the risk to which a pension fund or life insurance company could be exposed as a result of
higher-than-expected pay-out patterns. Increasing life expectancy trends among annuity policyholders and pensioners can
result in pay-out levels that are higher than originally accounted for. As a result, as life expectancy increases, strains are
placed on such organizations obligated to pay higher retirement benefits than initially expected.
In case, a similar movement of mortality is observed between mortality and longevity business, this has an offsetting
effect. However, the portfolios covered in mortality versus longevity risk are typically different (e.g., different countries,
gender structure, age groups or distribution channels) which may reduce the offsetting impact.
Adverse development can result in higher-than-expected pay-out patterns and therefore affect the cash flow and
profitability of the Hannover Re Group.
Life and health catastrophe risk
The Life & Health reinsurance business of the Hannover Re Group may be affected by events that affect a number of
lives simultaneously. Such events could affect the experience of both the mortality and the morbidity at the same time.
Consequently, an influenza pandemic is a material risk as it has the potential to impact all markets across the world. A
pandemic, whether influenza or another infectious disease, has the potential to affect a significant percentage of the
world's population, causing a high level of sickness and an increase in mortality rates. This could imply a temporary spike
in mortality and morbidity claims and impact the net income of Hannover Re Group accordingly. Please also refer to
"COVID-19 risks and pandemic crisis in general" below.
Morbidity and disability risk
Companies of the Hannover Re Group write different types of business where claim payments are contingent on the health
status of individual lives. The most relevant types of business are health business (which compensates for medical
expenses incurred), critical illness business (where benefits are paid upon the occurrence of pre-defined diseases) and
disability business, (which provides a regular income or a lump sum payment upon continued inability to work as a result
of a long-term illness or disability). For disability income business, morbidity benefits are often payable over potentially
many years and there is uncertainty involved in estimating the number of years over which benefits will be paid.
The liabilities for future policy benefits for individual risks or classes of business may be greater or less than assumed
and - if greater - negatively affect the profitability and cash flow of the Hannover Re Group.
Lapse and expense risk
Life or health insurance policies (with the exclusion of certain annuity business) typically provide a lapse option to the
policyholders. The pricing and valuation of life insurance and reinsurance business therefore requires assumptions on
future policyholder behaviour. Such behaviour may be different from expectations due to market development, capital
market movements or other circumstances. If actual lapses differ from expectations, the amount of future premium income
and claims outgoing will change.
As long-term business, the life and health business requires long-term administration efforts. Expense risk relates to the
uncertainty of the cost of servicing and administering underwritten contracts. Administration expenses are exposed to
inflation changes. Therefore, the risk that actual expense rates deviate from expected rates might lead to a negative
influence on Hannover Re Group's economic result and net income.
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