Talanx GWP set to top €50bn for first time in 2022 despite ‘high large losses’

German re/insurer  Talanx, the parent company of  Hannover Re and  HDI, is confident to meet its annual targets as its growing premium and group net profits in the first nine months of the year “compensates for high losses” from nat cats and reserves booked for potential losses arising from the Russia-Ukraine war. The company saw solid double-digit premium growth in almost all its business lines, with reinsurance increasing by solid 21.4 percent.

For the financial year 2022, Talanx is expecting group net profit in the range of €1.05–1.15 billion, and gross written premiums in excess of €50 billion for the first time in its history. The outlook is subject to “no turbulence” in the capital markets, and that large losses remain in line with expectations.

Talanx’s gross written premiums rose by 18.5 percent to €41.7 billion in the year to date, with net profit climbing 8.6 percent to €785 over the prior year period.

The company highlighted that its primary insurance operations played a key role in the growth, increasing the contribution to group net profit in the third quarter by 13 percent year-on-year, as did reinsurance activities for primary insurance operations.

Premium growth at the industrial lines division rose 17.8 percent in the first nine months to €6.9 billion. HDI Global Specialty generated roughly half of the growth, lifting premium income year-on-year by €456 million to €2.2 billion.

At €4.64 billion, the company's retail Germany division slightly improved its premium level year-on-year in the first nine months. Property/casualty segment rose gross written premiums by a double-digit 10.3 percent to €1.4 billion, primarily as a result of growth in motor insurance and in the business with small and medium-sized enterprises and liberal professions. The GWP in Talanx's retail international division saw a double-digit rise of 13.3 percent to €5.1 billion.

The group's reinsurance division grew gross written premiums by 21.4 percent to €26.3 billion. GWP in the property/casualty reinsurance segment rose by a substantial 27.6 percent year-on-year in the first nine months to €19.5 billion.

Overall, Talanx’s combined ratio rose slightly year-on-year to 98.6 percent percent, due to the reserves booked for Ukraine and losses from natural disasters. The group has now booked reserves of €361 million for potential claims expenses arising from the war. Total claims paid for losses from natural disasters in the first nine months were €1.4 billion, with €350 million being attributable to Hurricane Ian.

Total large losses rose to almost €1.9 billion, exceeding the budget of €1.4 billion for the first nine months of the year.

Torsten Leue, chairman of Talanx AG’s Board of Management, said: “We have delivered a strong performance in the year to date, despite the challenges posed by the high large losses from natural disasters. Among other things, this is due to our comparatively low exposure to Hurricane “Ian”. Our strategy, with its decentralised divisions and extensive diversification across different countries, lines and risks has clearly proven to be right once more. The third quarter in particular has demonstrated the solid state of our primary insurance operations. Moreover, the profitability enhancement measures in the Industrial Lines Division are having an extremely positive effect. All in all, we remain extremely optimistic that we shall meet our ambitious goals in 2022.”

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