HANNOVER Re, 1H: Double-digit growth in premium and operating profit

Reinsurer HANNOVER Re announced its 1H2018 business results confirm the FY2018 profit guidance with expected net income of more than EUR 1 billion, if large loss expenditure will not significantly exceed EUR 825 million and no unforeseen distortions on capital markets will be recorded.

Gross written premiums rose by 11.0% as at 30 June 2018 to EUR 10.0 billion (EUR 9.0 billion), the retention increasing slightly to 91.3% (90.3%). Net premium earned climbed to EUR 8.3 billion (EUR 7.5 billion), equivalent to growth of 10.8%.

At the same time, the operating profit (EBIT) totalled EUR 907.3 million (EUR 799.4 million), 13.5% more y-o-y. Group net income climbed by 3.8% to EUR 555.3 million (EUR 535.0 million). Earnings per share stood at EUR 4.60 (EUR 4.44).

In property-casualty, gross written premium surged by a vigorous 19.2% to EUR 6.5 billion (EUR 5.4 billion, while the underwriting result soared by 37.4% to EUR 204.7 million (EUR 149.0 million). The combined ratio stood at 95.7% (96.5%), while P&C operating profit (EBIT) climbed by 8.6% to EUR 688.8 million (EUR 634.3 million). Net income in property and casualty reinsurance fell by 2.1% to EUR 434.4 million (EUR 444.0 million) owing to higher tax charges.

Gross written premium in life and health reinsurance remained almost on the level of the previous year at EUR 3.5 billion (EUR 3.6 billion), a minimal decline of 1.5%. Net premium earned was similarly stable, recording a modest decrease of 1.5% to EUR 3.2 billion (EUR 3.2 billion). The operating result (EBIT) in life and health reinsurance surged by 32.8% as at 30 June 2018 to reach EUR 219.4 million (EUR 165.2 million). Net income for life and health reinsurance increased by 28.5% to EUR 146.8 million (EUR 114.2 million).

"Once again, both business groups, namely property and casualty as well as life and health reinsurance, plus a stable investment income shaped the positive result", Chief Executive Officer Ulrich WALLIN said.

"Bearing in mind the business development to date, we confirm our net income target of more than EUR 1 billion for 2018, although strains will be incurred in the second half of the year from portfolio management actions in connection with our US mortality business. This is something that we are willing to accept because we are thereby avoiding higher losses in subsequent years."

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