Hannover Re profit rises despite catastrophe losses
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Hannover Re SE on Thursday reported 2018 net income of €1.06 billion ($1.19 billion), up 10.5% over 2017, despite substantial catastrophe losses and a one-time charge in life and health reinsurance.
The German reinsurer’s property/casualty business net income rose by 11% to €929 million in 2018, the company said in a statement.
Gross written premiums rose 7.8% to €19.2 billion in 2018, as business opportunities opened up in what was still a challenging market, the statement said.
Net premiums earned increased 10.6% to €17.3 billion.
Gross written premiums in property/casualty reinsurance were up 11.8% to €11.98 billion as Hannover Re expanded its structured reinsurance business, the statement said.
After moderate losses in the first half of 2018, the second half of the year saw a sharply higher volume of major losses, the reinsurer said.
Some €193 million was set aside for the California wildfires, and the reinsurer recorded total net major losses in 2018 of €849.8 million, down from a historic high of €1.1 billion in 2017, according to the statement.
“Treaty recaptures prompted by rate increases in the book of legacy U.S. mortality business resulted in a charge to EBIT of €272.6 million,” Hannover Re added.
The combined ratio improved to 96.5% in 2018 compared with 99.8% in 2017.
Despite high catastrophe losses, capacity in the traditional and ILS markets remains abundant, and as a result prices and conditions in property lines remain under pressure, the reinsurer said.
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