Insurer Talanx expects profit fall this yearReprints
(Reuters) — Insurer Talanx A.G. on Monday said it expects net profit to drop this year after low taxes and proceeds from a share sale helped its earnings to beat analysts' forecasts in 2013.
Germany's third-biggest insurer reported 2013 net profit of €762 million ($1.05 billion) for 2013, above the highest forecast of €732 million ($1.01 billion) in a Reuters poll and up one-fifth on 2012.
But profits were boosted by a low tax rate and proceeds from the sale of a stake in Swiss Life in the first half of last year, something Talanx said would not be repeated this year.
The insurer expects net profit of at least €700 million ($965.5 million) in 2014, but that target takes account of a higher notional budget for major damage claims like storms and floods.
The budget, based on Talanx's expectations for claims, was raised to €185 million ($255.2 million) in its insurance operations and €670 million ($924.1 million) in reinsurance, from a previous €80 million and €625 million ($110.3 million and $862.1 million), respectively.
Large loss claims rose by 40% to €838 million ($1.15 billion) last year, driven by big payouts for storms and floods in central Europe.
"Despite the exceptional losses caused by flooding, windstorms and hail events, as well as the protracted period of low interest rates, we have generated the highest group net income to date and boosted our operating profit," Talanx Chief Executive Herbert Haas said in a statement.
Talanx's shares rose 1.6% to €25.40 ($35.03) by 0809 GMT, the biggest gainer in the index of German mid-cap stocks, which was flat.