Talanx reports reduction in Q1 profits
Against growing competition, Germany’s third largest insurer, Talanx, has reported a reduction in Q1 profits, but remains on target to reach its annual profit of €700 million.
The Group reported net income of €192 million in Q1 compared with €208 million for the same period last year and a stable premium income of €8.4 billion, compared with €8.5 billion in 2013.
Intense competition saw the non-life reinsurance segment contract with gross written premium down by 4.1 percent to €2.1 billion compared with €2.2 billion last year. Adjusted for currency translation effects, premium income fell by 1.7 percent.
The combined ratio rose only slightly by 0.5 percentage points to 94.5 percent, while the underwriting result decreased by 12.2 percent to €86 million, compared with €98 million in 2013.
The only large loss event in the first quarter was the disappearance of the Malaysian passenger airliner, resulting in net loss expenditure of €31 million. Investment income improved by 8.6 percent to €211 million, compared with €195 million in 2013, while the operating profit (EBIT) climbed by 7.6 percent to €286 million compared with €266 million. Non-life reinsurance contributed €95 million to Group net income.
Premium income in life and health reinsurance fell by 2.8 percent to €1.5 billion. The underwriting result contracted by 26.8 percent to –€87 million, while investment income declined by 6.4 percent to €152 million and the operating profit (EBIT) fell by 36.9 percent to €64 million. The contribution made by the segment to Group net income decreased to €21 million, compared with €37 million in 2013.
Herbert Haas, chief executive officer of Talanx AG said: "We are satisfied with the development of the first quarter. At €192 million our Group net income was within reach of the previous year's strong quarter, which had profited from capital gains and exchange gains on the disposal of Swiss Life shares. This is a good start to 2014. It reinforces our outlook that we can achieve Group net income of at least €700 million for the full financial year."
