Hannover Re posts P&C growth in H1

German reinsurer Hannover Re has posted better-than-expected H1 results, thanks to the growth of its property and casualty (P&C) reinsurance arm.

Between January and June, the company saw group net income increase by 21% to €1.2bn, largely thanks to its reinsurance revenue, which increased by 5.2% to €12.9bn.

This was despite large losses in P&C reinsurance, which Hannover Re stated were “within budget”.

Expenditures for large losses amounted to around €566m in the first half-year, which was within allocated and booked budget of €801m.

The largest net individual losses in the first six months came from the heavy rainfall in southern Germany at a cost of €120m, followed by the civil unrest in New Caledonia and intense rainfall in the UAE, both of which cost €82m.

Losses from the collapse of the Baltimore bridge are expected but should be “comfortably covered by the remaining large loss budget” according to Hannover Re.

The reinsurance service result increased by 61% from €598m to €963m, “reflecting the healthy profitability of underwriting activity”, while the combined ratio in P&C reinsurance improved to 87.8%.

“We have a successful first six months behind us, with significant growth in property and casualty reinsurance and satisfactory group net income,” said CEO Jean-Jacques Henchoz.

“At the same time, we saw a continued trend towards increasing frequency losses and losses from secondary perils such as flooding.”

Henchoz added that the company is “well prepared” for the second half of the year, which tends to be more loss intensive, due to its “selective underwriting approach and our retrocession strategy”.