HanseMerkur remains solid and strong despite the low interest rate environment in 2019: premium income increased by 11.7 percent / Group equity reached a new high of 689.4 million Euros (2018: 582.3 million Euros)
With over 7,700 newly insured in the main business area of Health and Long-Term Care Insurance, second highest net growth in the private health insurance sector / for the first time over 1.5 million customers in health insurance / gross surplus more than tripled to 383.3 million Euros in the last decade / for 2020 slight premium growth expected in the travel insurance business despite a corona-related forecast drop in sales of 50 to 60 million Euros.
- Gross premium income increases by 11.7 percent to around 2.3 billion Euros
- New business production across all sales channels increased again by 11.8 percent
- Gross surplus increases by 4.4 percent and is at a record level of 383.3 million Euros
- Group annual net profit after taxes at 98.6 million Euros
- Group equity at a new high: Increase for the first time by over 100 million euros to 689.4 million Euros
- Net return on investments is 4 percent
- Best investment result in history of 374.4 million Euros
- Investment portfolio is approaching the 10 billion Euros threshold
- HanseMerkur Group with a solvency ratio of 308 percent
- Health and Long-Term Care business area grows by 6 percent to 1,632.3 million Euros and wins over 22,000 new customers / BaFin complaint rate at an all-time low
- Premiums in the risk and old-age provision business segment increase by 66.2 percent due to the single premium effect
- Asset management subsidiary HM Trust AG manages assets of 9.8 billion Euros.
- Investments by the real estate subsidiary HanseMerkur Grundvermögen AG in residential and office properties reach 2.7 billion Euros
- HanseMerkur is recognized by ServiceValue / Focus Money as one of the most sustainable companies in the German Financial Sector
- The portfolio grows by 400,000 insured to 10.8 million customers
- Months January to May 2020: A high degree of digitalization in sales and service enables strong growth in the business areas Health (+ 5.5%) and Life (+ 155.1%) as well as a slight increase in Property-Casualty (+ 0.6% ). Travel Insurance booked corona-related sales decline of 26.6 million Euros (-24.4%)
- Goals for 2020: Slight group premium growth to over 2.3 billion Euros despite expected sales slump of 50 to 60 million Euros in the Travel and Leisure segment
Hamburg, July 7, 2020. The HanseMerkur Group continued its sustainable and profitable growth course in 2019 and further strengthened its reserves significantly. Gross premium income rose by 11.7 percent (industry average: + 6.7%) or 238.8 million Euros to 2,288.4 million Euros. The outstanding new business growth in all sales channels at HanseMerkur contributed to this result, particularly in the business areas of Health and Long-Term Care (+ 10.4%) and Risk and Pension Plans (+ 62.5%). The gross profit of 383.3 million Euros before taxes, provision for contribution refunds (RfB) and equalization reserve (SchwaRü) is at a record level. It tripled in the past ten years and rose by 4.4 percent in the year under review. After taxes, the annual surplus was 98.6 million Euros. Group equity is also at a record high, increasing by 18.4 percent and thus for the first time by over 100 million Euros (+107.1 million Euros) to 689.4 million Euros.
“Our company is extremely solid and strong despite the low interest rate environment,” said Eberhard Sautter, CEO of HanseMerkur, at the online press briefing on annual results in Hamburg. “As a Mutual Insurance Company, a strong equity base is a guarantee for the long-term security of all customer contributions and a central factor in our corporate strategy as a Mutual Insurance Company. The solid financial base also enables us to finance our strong growth for the 18th consecutive year. It is currently becoming apparent that the continuous expansion of its capital base means that HanseMerkur is also ideally equipped for crisis situations such as the corona pandemic.”
The portfolio of investments (9,786.9 million Euros) is scratching the 10 billion Euros threshold. In a challenging market environment, the net return on capital investments was above an average 4 percent (industry average: 3.3%), and the investment result reached an all-time high of 29.3 percent, the historical record of 374.7 million Euros. The financial strength of the HanseMerkur Group (SCR ratio: 308%) is also reflected in the good solvency ratios of the individual companies – such as HanseMerkur Krankenversicherung AG with 532 percent.
In the main business area of health and Long-Term Care, premium income rose by 6 percent (industry average: + 2.9%) to 1,632.3 million Euros. With over 7,700 insured, HanseMerkur recorded the second highest net addition in private health insurance (PKV). In addition, there were over 14,300 new customers in supplementary insurance. In total, over 1.5 million people in the company have health insurance for the first time. The complaint rate has been declining for years and, despite the increasing number of insured, only 19 BaFin entries were made in the reporting year. In the Risk and Retirement Planning business area, premium income rose significantly by 66.2 percent (industry average: + 11.5%) due to the significant increase in single premiums (+140.2 million Euros ) and stood at 355.0 million Euros . In the Travel and Leisure segment, premiums were at the level of the previous year at 223.5 million Euros (-0.4%). In the property and casualty business area, premium growth of 3.7 percent (industry average: + 3.4%) and premium income of 78.7 million Euros were achieved. In the Asset Management business area, HM Trust AG (HMT) managed assets of 9.8 billion Euros. The sustainable HMT retail funds were awarded the FNG seal by the Forum for Sustainable Investments. The real estate subsidiary HanseMerkur Grundvermögen AG has invested more than 2.7 billion Euros in residential and office properties since its foundation in 2014.
The HanseMerkur Group presented the second independent sustainability report for 2019, which covers 20 sustainability topics in 100 areas on 100 pages. In October 2019, HanseMerkur was recognized by the consulting and analysis company ServiceValue in cooperation with Focus Money as one of the 26 most sustainable companies in the German financial industry.
The customer base of HanseMerkur rose by around 400,000 to 10.8 million insured and has thus doubled in the past ten years. At the end of 2019, the HanseMerkur Group employed 2,177 employees in the office and in the field as well as full-time agents.
HanseMerkur 2020: Corona pandemic sets the pace / Slump in sales in travel insurance can be overcompensated by health and life insurance business
Business development January – May 2020
The corona pandemic left its mark on the first five months of the financial year. That is why it was important to think more strongly in scenarios to make the right decisions in a time of extreme uncertainty. Thanks to a high degree of digitalization in service and sales, rapid changeover of all processes did not result in any loss of productivity. Once again, above-average growth in new business in health (+ 21.7%) and life insurance (+ 88.9%) leads to rising premiums. The main business area of health and long-term care posted strong growth. Gross premiums rose by 5.5 percent for over 6,000 new fully insured. In terms of benefit regulation, the expenses for treatment of customers suffering from COVID-19 have so far amounted to an additional 1.1 million Euros. The risk and Pension Fund business segment recorded an increase in premiums of 155.1 percent, primarily due to the expansion of business with single premiums. The distribution of death benefit policies increased by 25.7 percent. The results of the property and casualty business area remained at the level of the previous year (+ 0.6%). In terms of personnel, the course was also set for a stronger positioning in the broker market. The Travel and Leisure business area saw a drop in sales of 26.6 million Euros (-24.4%) due to corona. The HanseMerkur Group’s capital investments rose for the first time to over 10 billion Euros. The asset management subsidiary HM Trust AG signed the six principles of the United Nations for responsible investing (UN PRI) in May 2020 and supports its stakeholders in helping to shape the change in society and the real economy towards a low-carbon and resource-conserving future. HanseMerkur Grundvermögen AG acquired real estate for a total of 260 million Euros in the first five months, including the Crefo campus in Neuss.
Crisis management during the corona pandemic (1-5 / 2020)
In January 2020, HanseMerkur responded to the corona pandemic by founding a crisis team, enacting hygiene regulations, and increasing home workplaces from around 200 to over 1,000 by mid-March 2020. In the meantime, up to 90 percent of the employees worked from the home office. The working time frame for parents with children was extended to the weekend. By the end of August 2020, no more than 350 employees will work at the HanseMerkur headquarters to guarantee contactless on-site operation. An anonymous and voluntary employee survey from May / June 2020, in which almost 1,100 employees took part, revealed, among other things, the widespread desire to continue making work and time flexible. Additional measures to safeguard capital investments were taken in mid-February 2020. Individual regulations were agreed with customers who faced material challenges, ranging from deferral of premiums to break periods, reduced insurance cover or postponing the start of insurance. The HanseMerkur Health Insurance (HMK) has so far knowledge of 737 of its fully insured who are affected by COVID-19. 234 of these had to be admitted to the hospital and 17 had to be ventilated using intensive care medicine. Eleven customers in the age range from 46 to 90 have died. The benefits regulated in the wake of the pandemic by the end of May 2020 amount to EUR 1.1 million. HMK was the first private health insurance company to offer its customers – but also non-insured persons – an intelligent corona bot on the website in cooperation with the Leipzig startup DOCYET in March 2020. The system with AI software enables an initial medical assessment, contains individualized instructions and answers frequently asked questions about COVID-19. The recommendations are regularly adapted to the guidelines of the Robert Koch Institute.
Goals and outlook for the 2020 financial year
For the current year, which is dominated by the corona pandemic, the Travel and Leisure business area is in crisis mode together with the tourism partners. The development of new markets as part of the internationalization strategy is currently exceedingly difficult. By the end of the year, the decline in premium income in travel insurance would have been between 50 million Euros and 60 million Euros compared to the previous year. The business policy income goal remains to compensate for this premium deduction by increasing premiums in the sick, life and property / casualty business areas and to achieve premium income of over 2.3 billion Euros for the first time with slight growth of around one percent.
The medium-term goal of a sustainable premium income of over 3 billion Euros and an annual surplus after taxes of more than 100 million Euros for the 150th anniversary of HanseMerkur in 2025 is being maintained. This includes placing among the top 10 private health insurance companies as well as exceeding a premium volume of 250 million Euros in the Travel and Leisure business area and 100 million Euros in the Property and Casualty business area.