(The following statement was released by the rating agency)LONDON, November 12 (Fitch) Fitch Ratings has affirmed Hannover Rueck SE's (Hannover Re) and its reinsurance subsidiary E+S Rueckversicherung AG's (E+S Re) Insurer Financial Strength (IFS) ratings at 'A+' and Hannover Re's Issuer Default Rating (IDR) at 'A+'. The Outlooks have been revised to Positive from Stable.Fitch has simultaneously affirmed Hannover Finance (Lux) S.A.'s EUR500m subordinated notes, due in 2040, USD750m subordinated notes, due in 2024, EUR500m perpetual subordinated notes, and EUR500m subordinated notes, due in 2043, at 'A-'. All issues are guaranteed by Hannover Re on a subordinated basis. KEY RATING DRIVERSThe revision of the Outlook to Positive reflects the consistent strength of Hannover Re's financial profile, as well as an expected improvement in financial leverage during 2014. The ratings continue to reflect a strong level of risk-adjusted capitalisation and consistent earnings generation from the core non-life reinsurance segment.Capital adequacy, as measured by Fitch, is considered to be strong and a positive rating factor. Quality is marginally reduced by a higher level of hybrid debt present within the reinsurer's capital structure. This is mitigated by what the agency considers to be a less volatile mix of business relative to peers. Although Hannover Re does not report a regulatory solvency margin, Fitch believes coverage based on this measure is also strong.Financial leverage is expected to fall to around 20% in 2014, anticipating that Hannover Re will call the EUR750m subordinated bond issue in February 2014. The reinsurer's fixed charge coverage improved to 10.7x at FY2012, bringing the five-year average for this metric to 11.0x. This remains supportive of the rating.Fitch views positively the relative stability of Hannover Re's profitability generation in recent years. The agency believes that this reflects the diversified nature of the reinsurer's underwriting platform, as well as the prudent investment strategy. The 9M13 combined ratio of 95.0% (9M12: 96.5%), which included 8.8pp (2012: 7.0pp) for catastrophe losses, remains below the reinsurer's target combined ratio of 96.0%.The reinsurer's life & health reinsurance business continues to develop, although the segment's contribution to profits remains modest. In the medium term, the contribution made by this segment is expected to increase, reflecting the reinsurer's higher premium growth target of between 5% and 7%. Fitch recognises that Hannover Re faces a number of headwinds that continue to test the wider insurance industry, including the persistently low yielding investment environment and softening pricing across certain major reinsurance classes.E+S Re's rating continues to reflect its core status within the Hannover Re group. Fitch regards E+S Re as a core subsidiary of Hannover Re due to its position within the group as the primary vehicle for underwriting reinsurance business in Germany, which is considered a key market by the group. This is despite the presence of significant minority interests (E+S Re is 63.7%-owned by Hannover Re) and its distinct brand identity. RATING SENSITIVITIESThe key rating triggers that could result in an upgrade include:--Net financial leverage consistently below 22% --Fixed charge coverage consistently above 11x--Combined ratio consistently below 97%The key rating triggers that could result in a downgrade include:--Net financial leverage consistently above 30% --Fixed charge coverage consistently below 5x--Combined ratio consistently above 103%Hannover Re is one of the largest global reinsurers with gross premiums of EUR13.8bn in 2012 and shareholders' equity (including minority interests) of EUR6.7bn at end-2012. The group transacts all lines of the non-life, life and health reinsurance business and has representative offices in 20 countries. Hannover Re is 50.2%-owned by Talanx AG, a wholly-owned subsidiary of Haftpflichtverband der Deutschen Industrie V.a.G. Contact: Primary AnalystMartyn StreetDirector+44 20 3530 1211Fitch Ratings Limited30 North ColonnadeLondon E14 5GN Secondary AnalystHarish GohilManaging Director+44 20 3530 1257 Committee ChairpersonChris WatermanManaging Director+44 20 3530 1168 Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email: hannah.huntly@fitchratings.com.Additional information is available at 
  www.fitchratings.com.
  The issuer did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.Applicable criteria, 'Insurance Rating Methodology', dated 19 August 2013, is available at 
  www.fitchratings.com.
 Applicable Criteria and Related Research: Insurance Rating Methodology
  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715468
 Additional Disclosure Solicitation Status 
  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=807704
 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.