27 October 2017Insurance

Talanx large losses exceed 2017 budget after 9 months, expects Q3 loss

The Talanx Group which includes Hannover Re and HDI said on Oct. 27 that large losses in the first 9 months of 2017 have exceeded the full year budget and that it expects to report a loss in the third quarter.

The group is currently assuming a large loss of around €900 million as a result of hurricanes Harvey, Irma and Maria, and the earthquakes in Mexico.

This means that after nine months the large loss burden after reinsurance and retrocessions for the group overall will be more than €1.2 billion, already exceeded the budget for the entire year.

In the third quarter, the industrial lines division was also impacted by an unusual accumulation of claims burdens, primarily as a result of the foreign property insurance business, the company said. This is resulting in a loss in this division for the quarter after taxes amounting to around €100 million. The increased investment income from realisations, particularly in reinsurance, and the gratifying improvement in German retail business partly compensate for these effects.

Overall, the Talanx group anticipates negative group net income of around €20 million for the third quarter. Talanx will present the detailed results for the first nine months on Nov. 13, 2017.

Talanx now expects group net income of around €650 million for the year 2017 as a whole. Return on equity is correspondingly likely to be around 7.5 percent. This forecast result is subject to the large loss burden during the fourth quarter not exceeding the large losses budgeted for one quarter. A dividend payout at least equal to the year-earlier level is assured from today's perspective.

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More on this story

Insurance
10 November 2017   Talanx, the parent company of Hannover Re, has appointed Torsten Leue as its new chief executive officer. The current CEO, Herbert Haas, will step down from the board of management at the request of the majority shareholder HDI.
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25 October 2017   E+S Rück, which bears responsibility within the Hannover Re Group for German business, expects to see premium growth in the German market for the upcoming round of treaty renewals at January 1, 2018.
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24 October 2017   Lines of business hit by the natural catastrophe losses in the third quarter of 2017 could ultimately offer an opportunity for Hannover Re to grow its book of business, Michael Pickel, executive board member–property & casualty target markets, Hannover Re, told Baden-Baden Today.