Talanx expects to crack €1bn profit mark for first time in 2022

Profit at European insurance group  Talanx, which owns Hannover Re and HDI, surged almost 40 percent in the first nine months of the financial year, despite recording higher large losses from natural catastrophes, making it the latest carrier to see earnings return to pre-pandemic levels. The company is expecting its net profit to exceed the €1 billion mark for the first time in 2022.

Talanx’s chairman Torsten Leue (pictured) is bullish on the earnings outlook for financial year 2021 and beyond, stating that its “strategy and modernisation programmes for the divisions are bearing fruit and have resulted in profitable growth.”

The group reported gross written premiums of €35.2 billion in 9M 2021, up 10.2 percent from €33 billion seen in the same period of 2020. Its third quarter GWP rose by 11.9 percent to €11.1 billion, with all the divisions recording premium growth.

The nine-months net profit was almost at the pre-pandemic 2019 level at €723 million, an increase of 39 percent on €520 reported in the prior year period.

Talanx noted that the negative effects of the coronavirus crisis on its profit amounted to €9 million in the third quarter, while the aggregate impact for the first nine months was €81 million.

Overall, the group suffered gross losses of more than €1 billion from the floods seen in western Europe. The higher large losses pushed its Q3 combined ratio up to 100.9 percent, from 99.7 percent in Q3 last year. However, the combined ratio for the first nine months improved to 97.6 percent, compared with 100.7 percent in the same period of 2020.

Talanx stated that it is on track to hit its annual target for group net profit of €900–950 million, with substantially higher forecast for financial year 2022, where it is anticipating earnings in excess of the €1 billion mark for the first time.

Leue said: “We have successfully weathered the coronavirus pandemic together. Our nine-month results put us almost back at the high level seen in 2019. We can achieve our targets for 2021 despite the substantial rise in large losses from natural disasters, especially in Q3.”

“Our reserving policy has enhanced our resilience,” he added. “We want to continue this journey so as to successfully meet future challenges as well. Our goal for 2022 is for Group net income to top the EUR 1 billion mark for the first time.”

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