Talanx results hit by cat losses but bullish on future
Talanx Group, the owner of Hannover Re, saw its profits hit by the recent catastrophe activity in North America but the company remained bullish on its full year results and enjoyed growth in its reinsurance business.
The company made a bet profit of €444 in the first nine months of 2017 compared with €636 million in the same period a year earlier. It said that for the financial year 2017, it expects a relatively solid group net income of around €650 million. For financial year 2018, Talanx is expecting a considerably improved group net income of around €850 million.
Overall, large losses relating to natural catastrophes cost the group just over €1 billion. But it stressed that losses from hurricanes Harvey, Irma and Maria and the earthquakes in Mexico will cost the group a little more than a quarterly result.
It noted that its reinsurance division was massively affected by the impact of natural catastrophes during the third quarter. Its contribution to group net income fell to €271 across the segments compared with €404 million a year earlier. Its combined ratio deteriorated to 104.3 percent percent due to the exceptionally severe impact of large losses, which meant the target of 96 percent was missed.
But gross written premiums in the property/casualty reinsurance segment rose by 15.2 percent to €8.2 billion.
"In the third quarter, natural catastrophes led to exceptionally large losses. We still, however, posted nine-month net income of €444 million and are expecting a group net income of €650 million for the year as a whole. As things currently stand, a dividend payout at least equal to the year-earlier level is assured. This shows the Group is in a solid and robust position and can also cope with exceptionally severe loss events," says Herbert Haas, chairman of the board of management at Talanx.
"Both the German and international retail business developed nicely. The positive trend in the German property insurance business, for both retail and commercial customers, is becoming established. This shows we are on the right path. We are expecting Group net income of around €850 million for 2018, providing natural catastrophes and other large losses do not exceed expectations. The way things are going at the divisions, I look forward to the coming year with confidence."
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