Hannover Re: COVID-19 bulk dents results but P&C enjoys solid growth in H1 2021
Hannover Re, the third-largest reinsurer in the world, saw double-digit gross premiums growth and its profit return to the pre-pandemic level in what its chief executive Jean-Jacques Henchoz (pictured) described as "satisfactory" half-year results. The profitable growth was driven by improved prices and conditions in the renewals, as well as a significant reduction in P&C large losses, somewhat offset by the bulk of pandemic-related losses in its L&H segment.
The group also confirmed that it anticipates a profit in the range of €1.15 billion to €1.25 billion for the 2021 financial year, together with a return on investment of around 2.4 percent and gross premium growth for the group in the upper single-digit percentages adjusted for exchange rate effects.
For the first six months of the year, Hannover Re's group net profit rose by 66.7 percent to €670.6 million despite Covid-19-related strains in life and health reinsurance, compared to €402.4 million for the same period of last year.
The contribution made by property and casualty (P&C) reinsurance to group net profit more than doubled to €592.1 million from €244.7 million, while the contribution made by life and health reinsurance fell by 44.4 percent to €104.8 million from €188.4 million in the same period of 2020.
Gross written premium for the group increased by 10 percent to €14.5 billion, compared with €13.1 billion in H1 2020.
The reinsurer's life and health business recorded €263.4 million losses from the pandemic in the first half of the year.
The property and casualty combined ratio improved sharply to 96 percent, compared with 102.3 percent reported in the prior year period.
"We achieved a thoroughly satisfactory half-year result that is broadly in line with our expectations and another testament to our robust market position and excellent risk management," said Henchoz. "As shown by our sustained strong growth, our risk covers are highly valued by our clients in times of crisis and beyond."
Towards the end of the second quarter heavy rainfall and flooding wreaked devastation across parts of Germany, Belgium, the Netherlands, Switzerland and Austria. Following an initial analysis of the damage Hannover Re expects the net expenditure to be between €200 million to €250 million. It noted that, for the second half of the year indications are also already emerging of losses from the riots in South Africa.
Henchoz added: "The catastrophic flood events in Germany and other European regions have once again shown that the climate is changing at a tremendous pace. We shall continue to progressively expand our sustainability measures and thereby play our part in addressing climate change and limiting its impacts.
"Despite all the challenges we are well on track to achieve our ambitious goals in the current financial year. Based on the figures for the first six months, I am optimistic for the development of Hannover Re's business over the remainder of the year."
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