Germany's Hannover Re SE (HNR1.XE) Wednesday said net profit in
the second quarter rose 10%, as payments the reinsurer had to make
for storm damage remained within budget and its investment result
improved slightly.
Hannover Re, one of the four biggest reinsurers world-wide, said
results after the first six months put it on track for full-year
profit and revenue targets, despite downward pressure on prices in
the sector.
Quarterly net profit climbed to 211.5 million euros ($282.9
million) from EUR192.3 million, but was shy of an analyst consensus
of EUR218 million. Net profit was EUR444.4 million after the first
six months, more than half the EUR850 million the company targets
for the full year.
Gross premiums fell 0.8% to EUR3.44 billion, and the investment
result was up 3.6% at EUR346.4 million.
In June and July, rates for contracts that came due for renewal
in North America and Latin America showed the continuing
challenging market environment for reinsurers, Hannover Re
said.
Due to protracted low interest rates in capital markets
following the sovereign-debt crisis and low returns on investment
elsewhere, the global insurance sector has attracted additional
liquidity that is keeping prices low. The liquidity is expected to
leave the sector once central banks start to raise rates again.
Hannover Re and Swiss Re are the first reinsurers to report
second-quarter earnings. Munich Re AG (MUV2.XE) will follow
Thursday. Swiss Re reported net profit of $802 million for the
second quarter.
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