Hannover Re yesterday joined a wave of European insurance players reporting forecast-beating results as rising premiums amid economic recovery offset high damage claims.
However, analysts expressed worry about Hannover’s underwriting performance in the second quarter and the prospect of reinsurance prices coming under pressure, contributing to a fall in Hannover’s shares which closed six per cent lower at €35.91.
The world’s fourth biggest reinsurer yesterday reported net and operating profit fell by less than expected in the second quarter from a year-earlier period that was boosted by one-offs.
Like other industry players such as Europe’s top three insurers, Allianz, Axa and Generali, Hannover Re has benefited from stronger sales of life insurance and investment products as consumers shake off memories of the financial crisis.
Despite stronger-than-expected damage claims in the first half of the year, Hannover Re was confident of achieving its full-year goal of earning €600m (£501m) in net profit even if claims in the second half of the year are in line with the long-term average, chief financial officer Roland Vogel told a conference call. “It’s not in danger,” Vogel said of the target, adding the usual caveats that there be no unexpectedly large losses from financial market turmoil or natural catastrophes like hurricanes, which reach peak season in September.
Damage claims in the first half of the year, at around €408m, were more than double the prior year period. Hannover also raised its expected loss on the Deepwater Horizon oil rig in the Gulf of Mexico to €89m from a previous estimate of €40m.
City A.M. Reporter