The Talanx Group has posted a net income of €325 million for the first half of 2020, substantially impacted from COVID-19.
Excluding the effects of the coronavirus, Talanx net income would in fact have been up substantially year-on-year, at €603 million.
Gross written premiums rose by 5.5 percent in the first half of 2020 to €22 billion, or 6.3 percent after adjustment for exchange rate effects.
Net coronavirus expenses of €658 million impacted operating profit, which amounted to €745 million.
The combined ratio was 101.3%. Excluding positive and negative coronavirus effects, it would have been stable, at 97.4 percent.
In total, losses from the pandemic in the first half of the year amounted to €824 million; however, these were absorbed in part by the budgeted large loss reserve.
“The coronavirus pandemic made the first half of 2020 difficult for us”, commented Torsten Leue, Chairman of Talanx AG’s Board of Management.
“The impact in the second quarter in particular – the height of the lockdown in Europe – was enormous and clearly exceeded our loss budget. However, adjusted for the losses from the pandemic, our underwriting would have been stable.
“We saw considerable premium growth in primary insurance and our profitability enhancement programmes are having the desired effect. Nevertheless, we must also be prepared for a challenging second half of the year.
“The coronavirus pandemic is not over yet and the consequences for economic growth are still unknown. What is clear is that the low-interest rate environment has been further exacerbated and that the hurricane season is only just starting. In other words, the situation remains extremely opaque and means we are still unable to provide an outlook for financial year 2020.”
At €824 million, coronavirus loss expenses were far greater than losses from natural disasters, although the latter were higher in the first half of the year than in the prior-year period at €190 million.
The largest losses were caused by the Nashville tornado in the USA (€44 million) and the New South Wales bush fires in Australia (€40 million).
The underwriting result fell by almost 60 percent due to the coronavirus to € –1,129 million.
€281 million of the total large losses of €1,018 million is attributable to primary insurance and €737 million to reinsurance.
Large losses clearly exceeded the pro rata budget for the period of €594 million.