Advertise
Resources
Member, Beacon International Group, Ltd.
FRANKFURT (Reuters)—Hannover Re beat expectations with net profit rising five-fold to €261.3 million ($346.3 million) in the first quarter, helped by surging investment income and the absence of big damage claims.
The result was above the highest forecast of €235 million ($311.4 million) in a Reuters poll of banks and brokerages, and well above the poll average of €200 million ($265.1 million).
The world's third-biggest reinsurer had been expected to see a strong recovery compared with the same period last year, which was hit by heavy claims from an earthquake and tsunami in Japan.
CEO Ulrich Wallin said the first quarter results laid the foundations for a successful financial year, provided major losses from hurricanes or earthquakes did not exceed a projected €560 million ($742.2 million) in the full year and there were no drastic downturns in the capital markets.
"Key drivers here were the highly satisfactory underwriting results in nonlife and life/health reinsurance as well as a very good investment performance," he said of first-quarter performance.
The hit from major losses in the first three months was just €60.6 million ($80.3 million), compared with more than €570 million ($755.4 million) in the year-earlier quarter.
Investment income rose more than 12% to nearly €441 million ($584.5 million) but Hannover Re said unrealized gains in coming quarters could not be expected to be as positive as in the first quarter.
Rival Munich Re already has said it expected the drop in damage claims and financial market tensions in the first quarter to have pushed it strongly into profit, from a loss in the year-earlier quarter.
Hannover Re, in which insurer Talanx has a 50.2% stake, trades at 7.6 times 12-month forward earnings, a premium to Munich Re at 7.
FRANKFURT (Reuters)—Munich Re vowed to return to net profit of around €2.4 billion ($3.17 billion) this year after disaster claim payouts and financial market turmoil hammered its 2011 results.