Talanx Group, the parent company of Hannover Re, has reported a rise in group net income to €1.17bn for the full year 2022 despite total large losses from natural disasters of €1.5bn, the highest volume in the history of the firm.
Talanx states that its primary insurance operation (encompassing the Industrial Lines, Retail Germany and Retail International divisions) contributed significantly to this strong business performance, lifting its share of group net income year-on-year to €541 million.
The firm’s gross premiums written in 2022 rose 17.4% to €53.4 billion, while net investment income stood at €3.7 billion, down from €4.7 billion, which Talanx says was driven by lower net gains on disposals. Meanwhile, operating profit rose 37.4% to €3.4 billion.
Large loss claims for the group totalled €2.18 billion, well above the €1.8 billion large loss budget for the full year 2022. The firm attributed this to natural disasters and reserves booked for Russia’s war against Ukraine.
The combined ratio for the entire group in 2022 was 98.9%, up from 97.7% in 2021, which Talanx also attributes to the aforementioned headwinds.
The reinsurance division saw double-digit growth in 2022, with a rise of 19.9% to €33.3 billion. However, higher claims for large losses impacted the division overall.
Talanx reported that the most significant large losses in the Property/Casualty (P&C) reinsurance segment in 2022 related to Hurricane Ian (€322 million), the floods in Australia (€233 million) and the February storms in Europe (€107 million).
Further, the COVID-19 pandemic still had a major effect on the Life/Health reinsurance segment, its magnitude steadily declined throughout the year.
All in all, operating profit was €2.5 billion, up from 1.7 billion in 2022, while the reinsurance division’s contribution to group net income rose to €707 million.
Commenting on the results, Torsten Leue, Chairman of Talanx AG’s Board of Management, said, “We grew profitably in a strongly changed market environment, increased our very strong earnings even further, and proved our resilience.
“Net income at both our primary insurance and our reinsurance operations improved, driven substantially by our international business. Foreign premium income now accounts for 83% of the total gross written premiums – 3 percentage points more than in the previous year.”
Leue continued, “Our distinct strategy, which is based on our decentralised, entrepreneurial structures and culture of trust as well as our broad diversification are paying off yet again.
“This is also demonstrated by the fact that we exceeded all our ambitious financial goals for the period to 2022.
“Consequently, we are optimistic about our prospects despite a challenging market environment and are pursuing our demanding goals for the period to 2025 with great confidence.”
In related news, Hannover Re recently announced a rise in net income for the full year 2022, although the firm’s P&C combined ratio deteriorated to 99.8% as large loss expenditure exceeded expectations for the sixth consecutive year.