Hannover Re profit up 19.3% despite soft property/casualty market

Hannover Re S.E. reported a 19.3% increase in its net income to €252.2 million ($277.0 million) for the second quarter despite a softening property/casualty market, CEO Ulrich Wallin said during a conference call Wednesday.

Net income for property/casualty reinsurance for the quarter for the German reinsurer was €247 million ($271.3 million), a 64.4% increase. The reinsurer's combined ratio was 95%, vs. 95.6% for the comparable quarter.

For the first half, the company reported a 19.7% increase in net income to €531.9 million ($584.2 million). Net income for its property/casualty reinsurance operations increased 20.3%, to €428.4 million ($468.7 million), while its combined ratio was 95.4%, vs. 95% for the comparable quarter.

Mr. Wallin said during the conference call the company is “able to raise our profit guidance for the full year from €875 million ($961.1 million) to around €950 million ($1.04 billion).”

“The first half year of 2015 also saw particularly strong earnings on the property/casualty business, on the life and health business and most notably for our investments,” Mr. Wallin said.

Mr. Wallin said the overall business development is “especially gratifying because the general environment international reinsurers are facing continues to be challenging. Property/casualty reinsurance in particular continues to be intensely competitive,” a trend that began in mid-2013, with Florida catastrophe business, for instance, experiencing its second straight year of reduced rates.

Hannover Re has so far been able to provide for the company's continued success in this climate, which is “very much in line with our amended strategy under the headline of 'Long term success in a competitive business,'” with its lower expense rate and extensive diversification being “particularly helpful,” he said.