Hannover Re avoids Q3 loss through asset sale
Hannover Re has posted a profit for the third quarter despite large losses exceeding its budget in the third quarter of 2017 through an increase in investment income driven by the sale of its listed equity portfolio.
The German reinsurer recorded a group net income of €13.9 million in the third quarter of 2017 compared to €303.4 million in the same period a year ago.
In the third quarter, Hannover Re was hit by large losses of €765 million from hurricanes Irma, Harvey and Maria and two earthquakes in Mexico, exceeding the budgeted large losses by €270 million.
Net underwriting results recorded a loss of €589.8 million in the third quarter of 2017 compared to a net underwriting profit of €47.2 million in the same period a year ago.
The combined ratio deteriorated to 118.3 percent compared to 94.4 percent over the period.
"After years of moderate losses, we saw an accumulation of severe natural disasters in the third quarter,” said CEO Ulrich Wallin. “Even - and indeed especially - after the considerable losses that we have shouldered following the natural catastrophe events in the third quarter, we stand ready to partner with insurers by providing tailor-made reinsurance solutions going forward, as we have in the past."
Group net income in the third quarter was positively influenced by the liquidation of the portfolio of listed equities.
The sale of the equity portfolio lifted the net investment results by 50 percent year on year to €603.1 million in the third quarter.
The company can use the capital thereby released to act on emerging business opportunities, according to the press release.
Overall, gross written premium in the third quarter increased 7.6 percent year on year to 4.49 billion in the third quarter of 2017.
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