Talanx hikes large-loss budget as it eyes 'new nat cat reality’

The  Talanx re/insurance group has hiked in its budget for large losses significantly on the basis of what it has described as a "new nat cat reality".

The group hiked its large loss budget to 6.6% of net earned premiums for 2022 and beyond, an increase of 0.6 percentage points from the initial expectation for 2021, officials told an investor call Monday (March 14).

"Neither conservative nor aggressive," CFO Jan Wicke (pictured) told analysts of the new view. "It's a reasonable view to the future to expect 6.6%."

The hike in forecast follows “the highest nat cat losses in the history of Talanx” in 2021 at €1.26 billion, just above the prior record from 2017. Three of Talanx’s top ten nat cat events since IPO came in 2021, helping push the broader large-loss tally some 16% over budget to €1.75 billion.

As a percentage of net earned premiums, large losses went 0.9 percentage points over the initial target of 6.0%.

Despite the record nat cat losses, Talanx pulled its underwriting results back into the black in 2021, pushing the combined ratio for the group down from 101.0% in 2020 to 97.7% in 2021. A 5.9 percentage point decline for industrial lines and a 3.9 percentage point decline for reinsurance led the charge.

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