The Talanx Group, the parent company of large European reinsurer Hannover Re, has set a number of new targets for the period to 2027 as the company is set to exceed its 2025 targets a year early.
In light of the recent strong performance, the financial services company has lifted its medium-term targets for the period to 2027.
Now, the goal is to grow group net income by 30% to more than €2.5 billion by 2027, and the firm expects the planned return on equity (ROE) to permanently exceed 12%. Additionally, Talanx aims to increase the dividend to €2.70 per share for the 2024 financial year that is now ending, and by about 50% to €4.00 per share by 2027.
This year, the Group will easily exceed its targets set in 2022 for its ROE, net income, and dividend distributions in the period up to 2025. Alongside profitable growth in its primary insurance arm, Talanx attributes the robust performance to the acquisition of the former Liberty companies in Latin America in 2023 and 2024. According to the firm, these will contribute more than €80 million after financing costs to Group net income in 2024, a year ahead of schedule.
Wilm Langenbach, the Talanx AG Board of Management member responsible for the Retail International Division and Chairman of the Board of Management at HDI International AG, stated, “The timing of the acquisition was good because the Latin American insurance market has recovered faster than expected. Not only is it already attractively sized, but it also offers substantial further potential for growth and profitability.
“The acquisition, the successful ongoing integration and our operating strength mean we have met our targets for next year ahead of schedule and have as good as implemented our strategy for the period up to 2025: we have diversified our portfolio by achieving a healthy balance between Europe and Latin America, and have strengthened our technical excellence. Thanks to the purchase, we are now the overall number two on the Latin American property and casualty market for retail customers.”
Of the targets set in 2022, a ROE of more than 10% has clearly been exceeded, and for 2024 is in excess of 15%. The net income target for the period was €1.6 billion, and the expectation is that 2024 Group net income will top €1.9 billion.
The company notes that this corresponds to a growth rate of more than 50%, so far above the net income growth of 25% targeted for the period from 2022 to 2025.
Torsten Leue, Chief Executive Officer, Talanx AG, commented, “We are going to clearly exceed the targets set out in our current strategy cycle a year early, despite the geopolitical and macroeconomic challenges. Our strategy, which is built around decentralization, diversification and cost leadership, has paid off, and this makes us highly confident that we shall reach our ambitious targets by 2027.
“We continued to expand our diversification strategy in recent years with our acquisition of the former Liberty companies in Latin America and with the particularly profitable growth of our Primary Insurance operations. We have put our words into deeds and taken Primary Insurance to a new level. At the same time, we have significantly enhanced the Group’s resilience while growing its net income. We aim to continue on this path and deliver continuous dividend growth for our shareholders.”
According to Talanx, its positive business performance is a result of strong, profitable growth in both primary insurance and its reinsurance business.
Jan Wicke, Chief Financial Officer, Talanx AG, added, “Being the cost leader and having a diversified business gives us important competitive advantages. But our business model also rests on other key pillars: our resilience and our balanced investment strategy.
“This ensures we can preserve our high level of stability and lays the foundations for continuing our extremely positive performance and steady dividend increases. This strategy is particularly valuable in challenging macroeconomic and geopolitical times. Our strategic approach and our resilience mean we are highly confident, despite the volatile geopolitical situation.”
