Identification of reportable segments

The reportable segments were determined according to the internal reporting and management structure of the Group, on the basis of which the Group Board of Management regularly assesses the performance of the segments and decides on the allocation of resources to the segments. As a first step, the Group split its business activities into the areas of insurance and corporate operations. The insurance business was then subdivided – to some extent along new lines – into five reportable segments; in view of the different product types, risks and capital allocations, a differentiation is initially made between primary insurance and reinsurance.

Reflecting its different products and business groups, reinsurance business continues to be split into the two segments of Non-Life Reinsurance and Life/Health Reinsurance. On account of their management according to customer groups and geographical regions (domestic versus international) – which therefore spans the various lines of business –, insurance activities in the primary sector have been restructured/presented in accordance with the following three reportable segments: “Industrial Lines”, “Retail Germany” and “Retail International”; this replaces the previous two-way split by line of business into Property/Casualty Primary Insurance and Life Primary Insurance. The revised segmentation in primary insurance thus corresponds to the responsibilities of the members of the Board of Management.

The area of “Corporate Operations” constitutes another reportable segment. Altogether, then, the Group has identified six reportable segments in conformity with IFRS 8 “Operating Segments”. The figures for the previous year have been adjusted accordingly.

The major products and services with which these reportable segments generate income are set out below. In addition, the main restructuring measures in the three primary insurance segments are discussed.

Industrial Lines: In the Industrial Lines segment we are for the first time reporting worldwide industrial business as an independent segment; it was previously part of the Property/Casualty Primary Insurance segment. The scope of business operations encompasses a wide selection of insurance products such as liability, motor, accident, fire, marine, special lines and engineering insurance for large and mid-sized enterprises in Germany and abroad. In addition, reinsurance in various classes of insurance is granted.

Retail Germany: Insurance activities serving German retail and commercial customers that span the various lines of business, including the bancassurance business transacted Germany-wide – i.e. insurance products sold over the counter at banks –, are managed in this reportable segment (previously included in the segments of Property/Casualty Primary Insurance and Life Primary Insurance). In addition to traditional composite insurance products, numerous life insurance products are offered in the form of individual, group and collective policies for a single or regular premium: endowment, annuity and term life insurance, accident insurance, unit-linked life insurance, occupational disability and strict “any occupation” disability insurance, foreign travel insurance and occupational retirement provision.

Retail International: The scope of operations in this new segment encompasses insurance business transacted across the various lines of insurance with retail and commercial customers, including bancassurance activities in foreign markets. The broad selection of insurance products largely reflects those offered in the Retail Germany segment.

Non-Life Reinsurance: The most important activities concentrate on property and casualty business with retail, commercial and industrial customers – first and foremost in the US and German markets –, marine and aviation business, credit/surety business, facultative business and catastrophe business.

Life/Health Reinsurance: The segment consists of the international activities of the Hannover Re Group in the life, health, annuity and accident lines.

Corporate Operations: The Corporate Operations segment encompasses – in contrast to the five operating segments – management and other functional activities in support of the business conducted by the Group, primarily relating to asset management, administration, run-off and placement of portions of reinsurance cessions, Group financing and other service tasks. Certain service companies previously allocated to the primary insurance segments are included in this segment from 2010 onwards.