Talanx says industrial lines growth strategy is paying off

German insurance and reinsurance group Talanx has reported that insurance revenue in its industrial lines division, led by HDI Global and HDI Specialty, rose by 10% last year to €9.1bn from €8.2bn.

“The division’s strategy of being a global industrial insurer and transformation partner that offers first-rate service and profitable underwriting is clearly paying off,” it said.

Talanx said that the main growth driver was property and liability business, which generated a strong insurance service result of €770m, up from  €574m in 2022, on the back of higher interest rates, a low level of frequency losses, and low large losses.

Large loss payments were within budget at €334m compared with €38m the year before. As a result, industrial lines’ combined ratio improved to 91.5% from 93%.

Operating profit rose to €446m from €430m, while the division’s contribution to group net income rose by 13% to €351m.

Talanx group generated record net income of €1.58bn in 2023, partly due to large losses within budget. The company is also optimistic about the future. Talanx is expecting group net income of more than €1.7bn this year. For 2025, it expects earnings in excess of €1.9bn.

This means that Talanx expects to exceed the original €1.6bn earnings target for 2025.

Group insurance revenue rose 9% to €43.2bn last year, while operating profit improved to €3.1bn from €2.8bn. All divisions contributed to earnings growth, with primary insurance accounting for 46% of group net income.

“We proved yet again in 2023 that our focused and ambitious strategy is a success. We are growing sustainably and profitably in the interests of our business partners, customers, shareholders and employees. We generated record group net income while also enhancing our resilience despite macroeconomic and geopolitical challenges. This demonstrates the high quality of our earnings and makes us optimistic for the coming years,” said Torsten Leue, chairman of Talanx’s board of management.

Man-made large losses amounted to €557m in 2023, while large losses from natural disasters totalled €1.6bn. Large loss payments in the primary insurance area were €439m, while the figure for reinsurance and Hannover Re was €1.62bn.

The group’s largest single loss was the summer storm in Italy, which impacted the budget by €354m.