Hannover Re on track in Q3 despite increasing frequency losses
Hannover Re is on track to achieve its financial targets for the year, it said, while revealing its results for the first nine months, despite seeing a clear trend towards increasing frequency losses, above all from secondary risks.
The German reinsurer has generated a nine-month profit of €1.4 billion, a rise of 25%, confirming its group net income target for the full year of at least €1.7 billion.
"We can look back on a favourable business development over the past nine months and with a more than satisfactory group profit we are still well on track to achieve our full-year targets," said Jean-Jacques Henchoz, CEO of Hannover Re. "The expenditures from large losses are within our budget after three quarters. We are, however, seeing a clear trend towards increasing frequency losses, above all from secondary risks, and a growing burden of man-made losses."
The reinsurance revenue (gross) increased slightly by 1.0% to €18.5 billion (previous year: €18.3 billion). Growth would have reached 3.8% at constant exchange rates.
The reinsurance service result, which reflects the profitability of underwriting activity less business ceded (primarily retrocessions and insurance-linked securities), increased by 47% to €1.6 billion (€1.1 billion).
It noted that the renewals in property and casualty reinsurance during the year brought improved conditions as well as inflation- and risk-adjusted price increases for Hannover Re. This was evident from the new business CSM (net), reflecting the profit expectations from the business written in the first nine months, which improved by 32% to €2.2 billion (€1.6 billion). The new business LC (net) decreased to €39 million (€273 million).
Reinsurance revenue (gross) in property and casualty reinsurance increased by 2.8% to €12.7 billion (€12.4 billion). Growth would have reached 5.5% at unchanged exchange rates.
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