FRANKFURT--German reinsurance company Hannover Re (HNR1.XE)
Tuesday said nine-month results put it "well on track" for
full-year targets, despite a 23% profit slump in the third quarter
amid a decline in the investment result, lower revenue and some
large claims.
Hannover Re, which is one of the world's four biggest reinsurers
by revenue, also issued goals for 2014. Next year, the group is
aiming for a net profit of around 850 million euros ($1.15
billion), gross revenue growth in the single-digit-percentage area,
and a 3.2% return on investments. It also pledged to continue its
dividend payout ratio of 35% to 40% of net profit. The goals assume
that major claims remain around EUR670 million and the absence of
"unforeseen downturns on capital markets," Hannover Re said.
In the third quarter, net profit fell to EUR205.5 million from
EUR265.5 million and was shy of the EUR208 million forecast in a
poll carried out by The Wall Street Journal. Net investment income
was 27% lower at EUR364.2 million, just below the forecast EUR361
million. Gross premium revenues were down 2.8% at EUR3.31 billion,
also lower than the forecast rise to EUR3.56 billion.
In the third quarter, Hannover Re had to pay for a number of
large claims, the biggest being a EUR64 million loss for hailstorm
Andreas that hit Germany in late July. Large claims for the first
nine months totaled EUR446.7 million, well within the full-year
budget of EUR625 million for major claims.
For all of 2013, Hannover Re is aiming for a net profit of
around EUR800 million, revenue growth of around 5%, a return on
investment of 3.4% and a dividend payout ratio of 35%-40% of net
profit.
Hannover Re cautioned that competition in the non-life
reinsurance business is expected to continue this year and next,
with downward pressure on prices that the sector will be able to
demand from its customers, the primary insurers. However, in
loss-affected segments, reinsurers should be able to push for rate
increases, Hannover Re said.
Hannover Re is majority owned by Talanx AG (TLX.XE), Germany's
third largest insurance group.
Write to Ulrike Dauer at ulrike.dauer@wsj.com; Twitter:
@UlrikeDauer
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