German reinsurance firm Hannover Re has issued provisional guidance on its 2016 results this morning, saying that it anticipates beating profit guidance by around 23%.
Based on provisional figures released this morning, Hannover Re says it could see as much as EUR 1.17 billion of profit for the 2016 financial year, up from EUR 1.15 billion in 2015.
It’s previously announced profit target for the year had been EUR 950 million, so the new guidance would beat target by 23% for the year, an impressive margin.
Hannover Re puts the profit beat down to improved underwriting results in property and casualty reinsurance, which is interesting as this is not the experience of all the larger, global players.
Tax rates have also been a factor and in 2016 this decreased, as expected higher tax expenditure provisionally recognised in the previous year did not recur.
Hannover Re said that its operating profit (EBIT) for 2016 amounts to roughly EUR 1.69 billion (slightly down on 2015’s EUR 1.76 billion). Gross premium underwritten for the year was on target at EUR 16.4 billion (down slightly on EUR 17.1 billion from the prior year).
The 23% profit beat is significant in the current underwriting and reinsurance market environment, with higher losses hitting global reinsurance firms in 2016 Hannover Re seems set to avoid the worst of this impact and will likely please its investors today.