Germany’s Talanx Group, the parent of reinsurer Hannover Re, has reported improved income and operating earnings for the first half of 2022 despite a considerable increase in large losses from catastrophe events, as well as a double-digit rise in premiums.
Group net income increased from €546 million for the six-month period last year to €560 million in H1 2022, while operating profits also increased modestly from €1,333 million to €1,358 million.
This was despite large losses from natural disasters surging from €261 million last year to €672 million this year, which Talanx said was “due among other things to the consequences of climate change”
The largest losses in this area related to the flooding in Australia at €259 million, while the storms that hit Central Europe in February came to €179 million and the floods in South Africa cost Talanx €84 million.
Meanwhile, man-made large losses fell tangibly year-on-year from €264 million to €65 million and the Reinsurance and Industrial Lines divisions have recognised total precautionary reserves of €346 million due to Russia’s war of aggression in Ukraine, with a large majority of the provisions relating to losses that have probably already been incurred but have not yet been reported. Total large losses amounted to €1,083 million, versus €527 million previously.
This resulted in the underwriting result improving overall in the first six months but remaining in loss territory at €-498 million, as net income for the Property & Casualty segment deteriorated but were offset Life Insurance improvements.
The Reinsurance Division, consisting of Hannover Re, performed well during the H1 period with premiums up 19.9% to €17.3 billion and operating profit only declining slightly to €930 million despite being impacted by the rise in the volume of large losses resulting from natural disasters and the reserves created in connection with Russia’s war of aggression in Ukraine.
“Our strong double-digit premium growth shows firstly that we are already reacting to the high level of inflation by adjusting our prices and secondly how robust our new business is. This has boosted our resilience further and positioned us to operate in this challenging market environment”, said Torsten Leue, Chairman of Talanx AG’s Board of Management.
“Despite the impact of natural disasters, inflation and Russia’s war of aggression in Ukraine, we are confirming our overall targets for the year as a whole, and in addition are lifting our growth expectations due to our strong performance in the first half of the year.”
