Hannover Re’s parent boosts profits despite high reinsurance claims

Talanx, the parent company of Hannover Re, enjoyed increased profits in the first half of the year and said it is on track for full year targets despite heavy catastrophe losses in some of its reinsurance businesses.

In the first six months of 2016, reinsurance claims increased to €353 million from €197 million in the same period a year ago. Overall, large losses amounted to €495 million compared to €363 million in the same period of 2015.

The most expensive single loss were the fires in the Canadian federal state of Alberta, which cost €132 million, followed by a severe earthquake in Ecuador, which accounted for €57 million. In the second quarter, storms in Germany resulted in losses of €55 million.

Profits and gross written premiums at unit Hannover Re Group  fell in the second quarter of 2016, largely due to the performance of its property/casualty reinsurance segment, which it stressed was facing challenging market conditions.

Nevertheless, the group-wide combined ratio over the first six months barely changed with 96.8 percent in the first six months compared to 96.4 percent in the first half of 2015.

The group, which also includes the HDI and Targo brands, reported a net income of €401 million for the first half compared to €311 million in the same period of 2015. Gross written premiums decreased slightly to €16.43 billion from €16.83 billion over the period.

“On balance, we are broadly satisfied with the way our business has performed during the first half of 2016, and we are optimistic about achieving our annual targets,” said Herbert Haas, the group’s management board chairman.

The group confirmed its net income target for 2016 of approximately €750 million.