Retail and industrial lines prompt Hannover Re parent to raise 2017 outlook

Hannover Re parent Talanx said on Aug. 14 that it is raising its outlook for group net income in 2017 to around €850 million from around €800 million after a jump in first-half earnings.

Net income for the first half of the year increased by 14.9 percent year on year to €463 million, driven by retail Germany and industrial lines.

Net investment income in the industrial lines division increased sharply by 25.7 percent in the first half of 2017 to €137 million. The combined ratio improved slightly to 97.2 percent in the first half of 2017 from 97.8 percent in the same period a year ago. A portfolio optimisation resulted in an improvement in both the cost ratio and the loss ratio. The underwriting result rose to €32 million from €25 over the period.

The positive performance allowed the division to make a higher contribution year-on-year to group net income during the reporting period, which amounted to €112 million compared to 91 million in the same period a year ago, according to the statement. Gross written premiums in the industrial lines rose by 3.3 percent to €2.8 billion over the period.

In the retail Germany division, earnings before interest and taxes (EBIT) increased to €63 million in the first half of 2017 from €56 million a year ago and its contribution to group net income doubled to €50 million from €24 million over the period. In property/casualty insurance, EBIT increased to €22 million from a negative €17 million due a low loss burden and the expenditure attributed to the restructuring within the KuRS investment and modernisation programme. Overall, premium income in the retail Germany division remained almost stable in the first six months at €3.31 billion.

"The first six months have gone well even though the market environment continues to be challenging. Our focus on the international market both in retail and industrial lines has proven to be positive,” said Herbert Haas, chairman of the board of management of Talanx.

Talanx is growing the retail international division particularly in Latin America and Europe. Premium income in the division rose by 13.7 percent to €2.8 billion in the first half, while EBIT grew to €116 million from €107 million a year ago.

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