Hannover posts record profits; proposes special dividend
Hannover Re has reported record profits for 2014 despite challenging market conditions. Its net profit increased by 10 percent to €985.6 million compared with €895.5 million in 2013.
Despite tough market challenges, the reinsurer also posted a 2.9 percent rise in gross premiums, which reached €14.4 billion compared with €14 billion in 2013. The company proposed a dividend for shareholders of €4.25 per share, made up of €3 per share plus a special dividend of €1.25.
"The successful financial year was based on a 25 percent rise in net income in life and health reinsurance and the continued good underwriting result in property and casualty reinsurance,” said the reinsurer’s CEO, Ulrich Wallin.
However, despite 2014 profits surpassing expectations, Hannover Re said that it continues to practice a profit-oriented, selective underwriting policy.
Operating profits for the group improved by 19.3 percent to reach €1.5 billion compared with €1.2 billion in the previous year.
Within the property/casualty reinsurance segment, reduced shares in Europe and in catastrophe business were offset by new business written in the Asia-Pacific region.
Gross written premium for the segment reached €7.9 billion, compared with €7.8 billion last year, while new premium earned grew to €7 billion, compared with €6.9 billion.
While loss expenditure was less than anticipated, the aviation line was impacted by an accumulation of losses while storm Ela in Western Europe caused heavy damage. This, along with other losses, resulted in net expenditure of €425.7 million for the year.
In the life and health reinsurance segment, Hannover Re expanded its business in China, Australia and the US. Consequently gross written premium increased by 5.1 percent to €6.5 billion, compared with €6.1 billion in 2013.
Group net income in the sector reached €205 million, compared with €164.2 million the year before.
Overall, the group’s income from investments under its own management grew by 3.9 percent to €1.1 billion, while shareholder equity reached €7.6 billion, compared with €5.9 billion the year before.
Looking to the 2015 results, Hannover Re said that it expects group net income to reach around €875 million, and gross premium volume to remain stable or show low single digit growth.
