Hannover Re, the world's fourth-biggest reinsurer, said second-quarter profit rose 29 per cent, beating analysts' estimates, helped by higher investment income. Net income advanced to €186.3 million from €144 million a year ago, the Hanover, Germany-based company said yesterday.
That compared with a €173.4 million average estimate of nine analysts surveyed by Bloomberg. Hannover Re, led by chief executive Ulrich Wallin, confirmed its full-year profit forecast of about €800 million after floods in Germany, Austria and the Czech Republic resulted in net claims of €136.9 million, the second quarter’s largest single event. The reinsurer said in June that costs for the floods probably won’t exceed its budget for major disaster claims.
German insurer Talanx AG, which sold shares in an initial public offering last year, owns 50.2 per cent of Hannover Re. The disasters that so far occurred in the third quarter, including a hailstorm that hit parts of Germany at the end of July, won't exceed the estimated expenditure on major losses for the period, Hannover Re said in the quarterly report on its website.
The company’s annual budget of €625 million for major claims compares to an actual claims figure of €259.5 million for the first half of the year. Reinsurers’ catastrophe claims usually increase in the second half of the year with the hurricane season in the North Atlantic and typhoons in the northwest Pacific.
Net investment income rose 24 per cent to €334.3 million in the quarter from a year earlier after the year-earlier result was burdened by losses on instruments used to hedge against inflation and credit risk associated with some securities deposits held by US life-insurance clients. Munich Re, the world's biggest reinsurer, on Tuesday missed analyst estimates with a 35 per cent decline in second-quarter profit, as claims from natural disasters rose. – (Bloomberg)