Hannover Re, Talanx withdraw 2020 profit guidance citing 'too many uncertainties'
Hannover Re, the third-largest reinsurer in the world, and its parent company Talanx, which also includes HDI Group, are withdrawing their profit outlooks for the financial year 2020.
The companies have taken this action in view of the ongoing COVID-19 crisis and the associated increased uncertainty surrounding claims development and the capital market environment.
Based on preliminary figures for the first quarter of 2020, Hannover Re anticipates group net income of about €300 million, compared with €293.7 million in Q1 2019, and an operating profit (EBIT) of about €426 million, compared with €450.0 million last year.
Talanx also said its existing net income target of between “more than €900 million” and €950 million is subject to "too many uncertainties" to be maintained.
The preliminary consolidated Q1 net income of Talanx is estimated at €223 million, which is roughly in line with the previous year's €235 million.
The companies, however, noted that it is still too soon to conclusively estimate the expected negative impacts of the COVID-19 crisis due to the prevailing uncertainties.
Hannover Re said the investment result as well as property and casualty reinsurance may see increased burdens.
"The figures for the first quarter were not significantly affected by the worldwide spread of the virus as they also benefited from lower other charges," the company said in a statement. "Therefore they cannot be used to draw conclusions about the full financial year."
According to preliminary estimates, Hannover Re's solvency ratio at the end of the first quarter remains above the limit and threshold of 180 percent and 200 percent respectively, allowing for considerable volatility in interest rates and credit spreads. At year-end 2019 the solvency ratio amounted to 251 percent.
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