European insurers perform well despite low interest rates

LEADING European insurers yesterday said they were happy with their performance during the first three months of 2013, despite the challenges posed by weak investment returns.

German giants Allianz, Hannover Re and Munich Re all said they were on track to meet year-end financial targets, in part thanks to a strong market for reinsurance products.

France’s AXA also revealed healthy results as its asset management division helped push up total sales by three per cent to €28.9bn (£24.5bn).

All the insurers benefited from a relatively benign period for the industry, with few major claims following catastrophes but had to contend with poor investment returns due to low interest rates.

Munich Re led the pack, announcing a 24.6 per cent increase in net profit to €972m. This compares well to the same quarter last year when it was hit with costs such as a €80m bill following the Costa Concordia cruise ship disaster.

“There happened to be lower claims burdens from major losses, but the group’s operating earnings also proved to be robust,” said Munich Re’s chief financial officer Joerg Schneider.

Fellow reinsurer Hannover Re said its net profit fell by less than analysts had expected in the first three months of the year, with payouts for damage claims tumbling to €13m from €61m for the same period last year.

The company added that it had seen no large damage claims so far in the second quarter and was on track to record profits of €800m.

Allianz provided investors with an update ahead of the company’s AGM, saying it expects earnings at its property and casualty insurance business to improve slightly over the course of the year.

Its net profit rose by nearly one fourth to €1.7bn, thanks to a strong performance in all lines.

Meanwhile, France’s AXA saw revenue growth driven by gains in life insurance and asset management.