IGTA Journal - Summer 2018

there go along higher balance sheet uncertaincies, because assumptions have to be made for a longer time frame. Profit and loss statement and the balance sheet will become more volatile. Are you happy with this reform and the requirements? We have started with the requirement to make the numbers of the insurers more transparent and clearer in order to better show the hidden values. With this goes the expectation to bring the price to book ratios and the price to earnings situations at a higher level. The set of regulations which has now been established, partly also with our cooperation, is, however, very complex. It will be a difficult task to present this in an understandable way. Can you show the potential? A share of Hannover Re which is traded at 1,5 or 1,6 times the IFRS-book value, is today just about slightly above the Solvency II-book value, which shows the economic value. The industry as a total is being traded significantly below the economic Solvency II-book value. If it is achieved to show the component of the economic balance sheet in a transparent way, then the insurance corporations should be traded at least at the economic book value and they should therefore show a significant stock price potential. However, this transparent presentation will be a challenge. You are also responsible for IT. Where stands Hannover Re in the digital change and how big is the need for action? In the past year we have defined a digital strategy. The strategy paper comprises two components: On the one hand, the Hannover Re is setting up itself completely digitally and in an automated way in order to maintain its cost advantage. Our prerequisites are good. Our operations, for example, already are running worldwide since long on a single reinsurance administration system. Next to the internal automization, we must adapt ourselves also to digital customers and must be in a position to market products in one country also in other countries. With investments in single insurtechs and fintechs, however, we have up to now been largely restrictive. Why? We are not orientated towards discovering the “Amazon”of the insurance business. But we want to be prepared for market changes which are happening especially in front end insurance. We are working at the development of new products and we are invested, for example, in the fintech incubator Finleap at Berlin. We are pursuing projects worldwide and we are setting up ourselves to export special innovations and to find customers in other countries. We have orientated ourselves towards the digital change and we have formed a team with specialists, which among other things is dealing with artificial intelligence. We are member of the Blockchain-Initiative B31, the objective of which is the execution of reinsurance contracts by way of the blockchain-technology. We also do not want to pursue a digital strategy in the ivory-tower. Every underwriting area must deal intensely with digital opportunities. We need this knowhow for our business with our clients. Which changes do you expect over the medium term in your industry? IGTA eJournal | Summer 2018 | 20