Structured solutions and cyber drive solid Q1 growth for Hannover Re
Hannover Re’s profits slipped slightly in the first quarter but the reinsurer enjoyed strong growth driven by structured reinsurance demand for reinsurance solutions providing solvency relief and growing demand for cyber coverage.
The German company made a net profit of €264.8 million in the first quarter, a 2.4 percent decrease on the €271.2 million it made a year earlier. Its combined ratio for the quarter increased marginally to 95.6 percent compared with 94.7 percent a year earlier.
On the back of these results, it said it had put in place a good basis for achieving its annual targets, which it increased to more than €1 billion from some €950 million earlier this year.
Its gross written premiums in the first quarter soared by 6.6 percent as at 31 March 2017 to €4.5 billion. Its property/casualty reinsurance business increased its GWP by 12.5 percent to reach €2.8 billion.
Its life and health reinsurance unit was stable with GWP slightly down by 1.7 percent to €1.7 billion.
The company noted that international property and casualty reinsurance markets remain “intensely competitive, although the price declines were more muted than in the previous year”.
It explained that the increased major loss expenditure incurred in 2016 had positive implications for reinsurance premiums only on a local level in the treaty renewals as at 1.1.2017. “In this challenging climate Hannover Re benefited from its selective and margin-oriented underwriting policy. In the area of structured reinsurance demand for reinsurance solutions providing solvency relief was highly gratifying. Cyber covers, too, offered growth opportunities driven by rising demand,” the company said.
Ulrich Wallin, chief executive of Hannover Re, said: "At the beginning of the year we raised our guidance for 2017 Group net income from more than €950 million to more than €1 billion. With our pleasing quarterly result we have put in place a good basis for achieving our targets. Both business groups, namely Property & Casualty and Life & Health reinsurance, as well as highly satisfactory investment income played a part here.”
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