Talanx Group, the parent company of Hannover Re, has reported that group net income increased 21% to €827 million in the first half of 2023, marking the best H1 result in the firm’s history.
Based on this number, Talanx affirmed that it is confident it will exceed the full-year group net income target of €1.4 billion.
Elsewhere in Talanx’s H1 results, insurance revenue rose to €20.9 billion, up from €19.2 billion in the previous year, while operating profit jumped by more than 30% to €2 billion.
The return on equity in H1 was 18.4% (15.4% in the same period last year) and is expected to be well above the strategic target of 10% for the year as a whole.
According to Talanx, all Primary Insurance divisions generated returns on equity in excess of 10% for the first time in H1.
Primary Insurance contributed 44% of the strong earnings figure and Reinsurance 56%, the firm said.
Talanx’s insurance service result rose to €1.6 billion in H1, compared to €1.3 billion in the same period last year. The firm said this is due to lower large losses and the time value of money resulting from the discounting of loss reserves under the new IFRS 17 accounting standard.
At €820 million, large losses payments declined in H1 compared to the prior-year period, and were below the pro rata budget for the period of €971 million. Talanx said that man-made large losses amounted to €245 million, while large loss payments for natural disasters totalled €575 million.
The largest single loss in the Group was of course the earthquake in Türkiye and Syria, which came in at €306 million.
On the back of these numbers, Talanx’s combined ratio improved to 93.7% from 95% in H1 of last year.
Meanwhile, the firm’s net H1 insurance financial and investment result before currency effects was €760 million, down slightly from €806 million last year. The Solvency 2 ratio as of 30 June 2023 was a “strong” 217%.
Focusing on the Reinsurance division, insurance revenue rose by 4% in H1 to €12.3 billion, or 6% after adjustment for currency effects, and the insurance service result climbed sharply to €1.079bn, from €694 million last year.
The net insurance financial and investment result before currency effects amounted to €524 million, while operating profit saw a good increase of 21% to €1.4 billion. The Reinsurance division contribution to group net income in H1 was €484 million, up from €409 million last year.
Finally, Talanx reported that insurance revenue in the Property/Casualty Reinsurance segment rose by 7% to €8.4 billion due to improved prices and conditions.
Large loss payments in H1 amounted to €607 million and were therefore within the pro rata large loss budget of €751 million; in the comparative period, this figure was exceeded by €239 million.
Torsten Leue, Chairman of Talanx AG’s Board of Management, commented, “Our Talanx Group has generated extremely successful results for the first half of the year. We have seen strong growth in insurance revenue and the highest six months Group net income in the Group’s history.
“We are therefore optimistic that we will be able to exceed our revenue and Group net income targets for 2023 even though the hurricane season is not over yet.
“We have also got off to a strong start in our new strategy cycle for the period up to 2025 – a strong signal that our divisions are continuing their successful work and that our Group is extremely resilient, despite global economic challenges.”
