HDI and Hannover Re drive record Talanx results

The Talanx Group has lifted its previous group net income target of more than €1.7bn for 2024 to more than €1.9bn. The German insurance and reinsurance group, parent of HDI Global and Hannover Re, said this means it will reach – and clearly exceed – its original 2025 target of €1.6bn, which it announced back in December 2022, a year earlier than planned. The group confirmed its return on equity target of more than 15%. For 2025, the Talanx Group is now expecting group net income of more than €2.1bn. It will announce new medium-term group targets, outline its future dividend policy and give an overview of the retail international division’s Latin America business at its Capital Market Day on 11 December 2024. As usual, targets are subject to the proviso that no turbulence occurs on the currency and capital markets, and that large losses remain in line with expectations. The current geopolitical and macroeconomic situation is an additional source of uncertainty, warned the Hanover-based group. Hannover Re reported “an extremely strong” reinsurance result for the first nine months of 2024 but HDI Global’s results were even better, said Talanx. Insurance revenue was up 20% and contributed 47% to group net income. The group attributed the excellent result in what remains a firm insurance and reinsurance market to “prudent risk management and underwriting expertise”. Talanx said the ongoing successful integration of the former Liberty companies in Latin America also added to strong earnings. The group’s return on equity rose to 19.4%, up from 18.4% for the first nine months of 2023, and the full-year figure is expected to be well above the strategic target of at least 10%. “We have taken our group net income to a new, record level and exceeded last year’s figure after only nine months – our risk-aware underwriting, our diversified business model including the acquisition of the companies in Latin America, and our decentralised strategy are paying off yet again,” said Torsten Leue, chairman of Talanx AG’s board of management. “The rise in large losses in the third quarter, which was due to the large number of natural disasters, is in line with our expectations and our budget. This means we still have a cushion for the rest of the year and are upbeat about the future: we have lifted our earnings forecast for 2024 to more than €1.9bn and are now expecting 2025 group net income of more than €2.1bn. In other words, we are not only going to hit our original 2025 earnings target of €1.6bn one year ahead of schedule, but will probably also exceed it substantially.” The insurance service result for the first nine months of 2024 was up 45% to €3.7bn from €2.6bn at this point last year. At €1.8bn, large loss payments were in line with expectations despite a large number of large loss events, remaining within the pro rata budget for the period of €1.9bn, said Talanx. Man-made losses amounted to €488m, while large loss payments for natural disasters totalled €1.3bn. The largest single loss incurred by the group was floods in Eastern Europe (€265m). Other large losses included Hurricane Helene in the US and the floods in southern Germany. All in all, Primary insurance reported large losses of €422m, while the corresponding figure for reinsurance was €1.3bn, said the group. The group’s combined ratio improved to 91.2% from 93.5% at this point last year, despite the large number of loss events. The net insurance financial and investment result before currency effects remained almost stable at €956m, down from €1bn. Operating profit (EBIT) grew 33% to €3.7bn, up from €2.8bn, while group net income rose 24% to €1.59bn. The Corporate & Specialty Division is continuing its strong revenue and earnings growth, said Talanx. Insurance revenue rose 11% year on year to €7.3bn, up from €6.6bn in the first nine months of 2023. “This encouraging performance was due both to new business and to inflation-related price adjustments in its existing business. The insurance service result rose to €692m from €481m on the back of an improved frequency loss ratio in particular,” said Talanx. Large loss payments climbed year on year to €313m, up from €267m, but undershot the pro rata budget for the period, which was recognised in full, by €48m. The combined ratio improved to 90.5% from 92.7%. The net insurance financial and investment result before currency effects rose to €65m from €22m last year due to higher investment volumes and an increase in current interest income. Its contribution to group net income rose to €362m from €243m. The group also recently announced changes at the top as Jean-Jacques Henchoz, member of the board of management of Talanx AG with responsibility for the reinsurance division, will not extend his expiring contract at his own request and will leave the board on 31 March 2025. His successor as of 1 April 2025 will be chief financial officer and designated chief executive officer of Hannover Re Clemens Jungsthöfel. Henchoz will remain “closely associated” with Hannover Re and the Talanx Group, it said.

HDI and Hannover Re drive record Talanx results

German group exceeds full-year target in first nine months

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Want to read this article?

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