Germany’s Talanx Group, the parent of reinsurer Hannover Re, has confirmed that its net income reached a record €1,011 million in 2021, thanks mainly to continued growth and optimisation programs in its primary insurance operations.
Notably, gross written premiums saw a double-digit improvement of 10.7% to €45.5 billion in the financial year, with all divisions contributing to this growth.
Talanx achieved this performance despite also taking the highest level of losses from natural disasters that it has ever seen, with floods in Western Europe and Hurricane Ida in the US contributing more than half of the €1,261 million total large losses in 2021.
In addition, the coronavirus pandemic impacted group’s net income by €122 million as a result of excess mortality in Life/Health Reinsurance in particular, whereas Covid-19-related claims experiences in primary insurance returned to a normal level.
Natural disasters and the coronavirus pandemic impacted operating profit by a combined €638 million, but operating profit still managed to climb 49% to €2.5 billion due to Talanx’s optimisation programs in primary insurance and a continued extremely strong performance by reinsurance.
Hannover Re reported a 39% rise in net income to €1.23 billion for 2021, despite major losses in its property and casualty (P&C) arm coming in above expectations, and a sizeable COVID-19 impact in its life and health (L&H) reinsurance business.
“The fact that our net income exceeded one billion despite the increase in claims paid to customers clearly shows that our profitable growth is on an extremely sound footing,” said Torsten Leue, Chairman of Talanx AG’s Board of Management.
“Our strategy and the modernisation programmes in the divisions are having the desired effect. The combination of the stronger contribution made by primary insurance to Group net income and growth in our reinsurance operations is increasingly enhancing our business model’s earnings potential,” he continued.
“This means we can approach the future and the new challenges that are already becoming apparent with confidence. Inflation, a more restrictive interest rate policy and geopolitical crises are emerging as new, crucial external factors influencing what we do.”