Hannover Re warns on challenging conditions
Profits at Hannover Re crept slightly higher in the first quarter of 2014 driven by the strong performance of its non-life reinsurance operation. But its CEO warned on what he called a challenging business environment.
The company’s net income was €233 million in the quarter, a rise of 0.7 percent compared with the €231.2 million in the same period last year.
The increase was driven by Hannover Re’s non-life reinsurance operation where net income climbed by 13.1 percent to €197.8 million, building on the €174.9 million reported in the comparable period a year earlier.
Gross written premium for the reinsurer as a whole contracted by 3.6 percent to €3.6 billion, compared with €3.8 billion in the first quarter of 2013. At constant exchange rates the decrease would have been 0.7 percent.
Its combined ratio rose slightly to 94.4 percent, compared with 94 percent in the same period a year earlier.
Ulrich Wallin, chairman of the executive board, noted that the reinsurance industry faced a difficult and challenging business environment in the first quarter of 2014 but he felt that Hannover Re had adjusted well to the conditions.
“This demonstrates that we have adjusted well to the challenging environment, after the first quarter we are therefore in a position to state that the assumptions underlying our net income expectation of €850 million for the full financial year are supported by the results for the first quarter.
“These assumptions are, as we have already communicated on a number of occasions, that we anticipate an improved result in life and health reinsurance relative to 2013, that we can profit from the high confidence level of our loss reserves in non-life reinsurance, that we have maintained the high quality of our non-life portfolio while at the same time cutting retrocession costs and that we can generate stable investment income in absolute terms.”