Talanx Q3 profits up despite industrial lines losses
Germany-based Talanx Group increased net income to €51 million in the third quarter of 2018 from a loss of €19 million in the same period a year ago despite the “unsatisfactory performance” of the industrial lines business.
Multiple large losses and the unusually high amount of frequency losses in the third quarter led to a quarterly loss of the industrial lines division.
The combined ratio in industrial lines deteriorated to 128.9 percent in the third quarter from 135.0 percent following multiple large losses and an unusually high number of frequency losses. The underwriting result improved slightly to a loss of €196 million from a loss of €211 million over the period. Earnings before interest and taxes (EBIT) was a negative €110 million in the third quarter after a loss of €137 million in the same period a year ago. Overall, the unit contributed a net loss of €89 million to the group in the third quarter after a net loss of €98 million in the same period a year ago.
“Despite the unsatisfactory performance in the industrial lines division, especially in the third quarter, we have nevertheless achieved a higher nine-month result compared to the previous year of €488 million and we anticipate group net income of around €700 million for the year as a whole,” said Torsten Leue, chairman of the board of management at Talanx.
“German and international retail business also continued to perform positively in the third quarter. We are ahead of schedule with our strategic programme “KuRS” which aims to boost profitability in our domestic market. International retail is and remains a driver of growth, despite being somewhat curbed by current exchange rate effects. Reinsurance is performing very positive as expected”, Leue noted.
“In the industrial lines division, our 20/20/20 programme is well on the way. The increase in premiums achieved so far will already affect the income in financial year 2019, so that we are expecting a balanced result in underwriting across the divisional lines.”
The industrial lines division boosted gross written premiums by 15.8 percent year on year to €858 million in the third quarter.
Overall, the group’s gross written premiums climbed by 8.4 percent year on year to €8.3 billion in the third quarter. The combined ratio improved to 102.1 percent from 114.4 percent over the period.
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